CapitaLand Mall Trust and CapitaLand Commercial Trust Proposed Merger

Following the proposed merger between Frasers Logistics and Industrial Trust and Frasers Commercial Trust, another REIT announced their merger. On 22nd January 2020, CapitaLand Mall Trust and CapitaLand Commercial Trust announced their proposed merger.

CapitaMall Trust currently has 15 properties in its portfolio while Capita Commercial Trust has 10 properties. With the proposed merger, the merged REIT will have a total of 24 properties. (Capita Commercial Trust has 60.0% of Raffles City while CapitaMall Trust owns the other 40%)

With the merger, the properties are valued at S$22.9 billion.

With the proposed merger, CapitaLand Commercial Trust holders will receive

  • 0.72 CapitaMall Trust Units per CapitaLand Commercial Trust unit
  • S$0.2590 in cash per CapitaLand Commercial Trust unit

Pro Forma DPU Accretion

CapitaMall Trust currently makes up 9% of my stock portfolio. I currently do not hold any CapitaLand Commercial Trust units thus I will not receive any new CapitaMall Trust units or receive any cash distribution.

However, as a CapitaMall Trust unit holder, I will be keen to know what is the increase in Distribution Per Unit (DPU) after the merger.

According to the presentation slides, Pro forma DPU accretion is expected to increase 1.6% from 11.97 cents to 12.17 cents.

With every announced proposed merger, I noticed the share price has always gone up the next day. The share price of CapitaMall Trust has jumped from S$2.58 to S$2.64.

The share price of CapitaLand Commercial Trust has jumped from S$2.12 to S$2.18.

Past Merger of REITs

Here are the news on the merger of other REITs.

Which is the next REIT that will announce a merger?

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