On 14th February 2022, Lendlease Global Commercial REIT (LREIT) announced that they will acquire the remaining interests in Jem. The acquisition was funded through Equity Fund Raising by means of Private Placement and Preferential Offering.
If you remember, back in October 2020, Lendlease Global Commercial REIT had already acquired a stake in Jem via a 5% interest in Lendlease Asian Retail Investment Fund 3, which holds a 75.0% indirect interest in Jem.
In this round of Equity Fund Raising, the private placement was 3.3 times subscribed by new and existing institutional and other accredited investors. Due to overwhelming responses from the investors, the full upsize option of S$75 million was exercised. With the exercise of the upsize option, a total of 551.7 million New Units will be issued pursuant to the Private Placement, increasing the aggregate gross proceeds raised to approximately S$400 million.
The preferential offering was launched on 4th April 2022 and was 1.4 times subscribed. The allotment of 345,577,449 new units at an issue price of S$0.72 per new unit was fully subscribed and raised approximately S$249 million.
Together with the private placement and preferential offering, a total of more than S$1.7 billion was raised to fund the acquisition of Jem.
How did the share price react to the preferential offering?
As you can see below, there is not much negative nor position reaction to the share price. Preferential Offerings are meant to be non dilutive to the share price.
Shares of Lendlease Global Commercial REIT has traded between a range of S$0.75 to S$0.88 from December 2021 to April 2022.
As a dividend investor, I am definitely interested in the current dividend yield. Based on FY2021 Distribution Per Unit of 4.68 cents and current share price of S$0.80, the current dividend yield is 5.85%.
In my opinion, the current dividend yield is attractive but of course there are other metrics you should consider before jumping onto the wagon.