FLT and FCOT propose merger for $1.54b

They also plan to fully acquire Farnborough Business Park in the UK.

Frasers Logistics & Industrial Trust (FLT) and Frasers Commercial Trust (FCOT) have proposed to merge into an enlarged REIT for a total consideration of $1.54b, the companies announced in an SGX filing. This comprises of $138.1m in cash and 1,128 million consideration units.

The merger will be made through a trust scheme of arrangement, with FLT acquiring all units of FCOT in exchange for a combination of cash and new units in FLT. FCOT unitholders will receive $1.68 for each unit as at the books’ closure date, each fulfilled with $0.151 in cash and 1.233 new units in FLT at an issue price of $1.24 per unit.

Following the merger, sponsor Frasers Property Limited (FPL) and its related corporations are expected to hold around 21.9% of the total issued units in the REIT. The group currently holds about 19.6% in FLT and 25.9% in FCOT.

The enlarged REIT will hold a portfolio of logistics, industrial, office, business park and commercial assets worth about $5.7b across Asia Pacific, Europe and the United Kingdom. It expects to become one of the top 10 largest S-REITs by market cap and will have greater index representation on the FTSE EPRA/NAREIT Index, the joint release said.

FLT is also planning to acquire a 50% interest in Farnborough Business Park (FBP) from a wholly-owned subsidiary of Frasers Property Limited (FPL) for an estimated consideration of $157.7m (£90.1m).

The remaining 50% interest in FBP is currently indirectly held by FCOT. Upon completion of the proposed acquisition, the enlarged REIT will hold 100% of the interest in FBP. 

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