The managers of Mapletree Commercial Trust (“MCT”) and Mapletree North Asia Commercial Trust (“MNACT”) has heard the voices of existing unit holders and revised the MCT and MNACT merger.
I previously wrote about the details of the merger between MCT and MNACT. Being an existing Mapletree Commercial Trust holder, I am not so happy about it because the merger exposes me to riskier markets such as China and Hong Kong. The merger will also drive up the gearing ratio.
On the other side, some Mapletree North Asia Commercial Trust (“MNACT”) unitholders did not want units of Mapletree Commercial Trust (“MCT”). They merger left them no choice.
On 21st March 2022, the managers announced a new scheme consideration after hearing the voices of unitholders.
Let us look at what was offered for Mapletree North Asia Commercial Trust (“MNACT”) unitholders.
At MNACT Manager’s request, MCT Manager has included alternative Cash-Only Consideration with Sponsor’s support. This means that MNACT unitholders can opt for 100% cash consideration.
For Mapletree Commercial Trust (“MCT”) unitholders, no action is required from our side. The only difference now is that the Sponsor has undertaken to subscribe for the Maximum Preferential Offering Units of up to S$2.2 billion at the issue price of S$2.0039 to fund the additional cash requirement for the inclusion of the Cash-Only Consideration.
The benefits of this arrangement are
- Pro forma financial effects of the Merger remain intact as compared to the original terms of the Trust Scheme.
- Provides MNACT Unitholders with greater flexibility in choosing to (i) stay invested in the Merged Entity; or (ii) fully realise their investment.
- Safeguards the interests of MCT Unitholders as Merger remains DPU and NAV accretive.
Upon the news the share price of both MCT and MNACT have gone up.
Mapletree Commercial Trust Share Price (25th March 2022)
Mapletree North Asia Commercial Trust Share Price (25th March 2022)
Summary of Revised MCT and MNACT Merger
In summary, the revised scheme has no significant “candies” for MCT unitholders. However, the Preferential Offering and the Sponsor continues to support the MCT Manager’s agreement to waive its acquisition fee entitlement does greatly ensure MCT unitholder’s interest are carefully thought of.