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Ascott Residence Trust, Ascendas Hospitality Trust get over 99% approval from unitholders for proposed combination

Stanislaus Jude Chan

SINGAPORE (Oct 22): The unitholders of Ascott Residence Trust (Ascott REIT) and Ascendas Hospitality Trust (A-HTRUST) have voted overwhelmingly in support of the proposed combination of the two hospitality real estate investment trusts.

At their respective extraordinary general meetings (EGMs) and scheme meetings on Monday, Ascott REIT and A-HTRUST received strong approval of over 99% of the total number of votes from unitholders.

The combined entity, which will continue to be named Ascott Residence Trust, will have a quality portfolio of 88 properties across 39 cities in 15 countries.

Top image: Beh Siew Kim, CEO of the manager of Ascott REIT, speaking to unitholders after the EGM and scheme meeting on Tuesday.

Interested parties of Ascott REIT and A-HTRUST, including CapitaLand entities, were required to abstain from voting on certain resolutions.

The proposed combination was subject to the approval by more than 50% of the total number of votes cast by the unitholders present and voting at the respective EGMs. Certain resolutions also required the approval of 75% of total votes.

The proposed combination was also subject to the approval by a majority in number of unitholders representing at least 75% in value of the units held by these unitholders present and voting at the respective scheme meetings.

All six resolutions were duly passed, the two CapitaLand subsidiaries announced in a joint release on Monday.

Under a trust scheme of arrangement, Ascott REIT will acquire all the A-HTRUST stapled units for a consideration of $1.0868 per A-HTRUST stapled unit. This will comprise 5.43 cents in cash, and 0.7942 Ascott REIT-Business Trust stapled units issued at a price of $1.30.

The consideration is predominantly based on a gross exchange ratio of 0.836x, derived from the latest audited net asset values per A-HTRUST stapled unit and Ascott REIT unit.

On a FY18 pro forma basis, the combination is 2.5% accretive to Ascott REIT’s distribution per unit. The transaction is 1.8% accretive to A-HTRUST’s FY20/19 distribution per stapled security on a pro forma basis.

The last day of trading of the A-HTRUST stapled securities is expected to take place on Dec 16, while the delisting of A-HTRUST is expected to be on Jan 3, 2020.

“The combination of Ascott Residence Trust and Ascendas Hospitality Trust will cement the combined entity’s position as the largest hospitality trust in Asia Pacific with an asset value of $7.6 billion,” says Beh Siew Kim, CEO of the manager of Ascott REIT.

“The combined entity, Ascott Residence Trust, will be CapitaLand’s sole hospitality trust with a larger, well-diversified portfolio, and a mandate to invest in lodging assets globally,” she adds. “With our $1 billion debt headroom, we will have greater financial flexibility to seek accretive acquisitions and value enhancements.”

“Fuelled by bigger funding capacity, unitholders can look forward to participating in a hospitality trust that would fulfil our aspirations for greater growth,” says Tan Juay Hiang, CEO of A-HTRUST’s managers.