CapitaLand further woos CapitaMalls Asia with $0.23 rise in offer price

This will be the last price revision.

CapitaLand seems to be all set to get CapitaMalls Asia based on its recent move to raise the offer price to $2.35 per share in cash.

According to Nomura, CapitaLand announced on 16 May before the market opened that it has raised the offer price to privatise CapitaMalls Asia (CMA SP, Buy) to SGD2.35/share in cash (from SGD2.22/share).

In addition, CAPL will not further revise the offer price. Also, the 90% acceptance condition has been waived and the offer has become unconditional. Lastly, CMA shareholders who have earlier accepted the offer will be entitled to receive the revised offer.

Here's more from Nomura:

Our NAV estimate and TP for CMA are SGD2.43/share and SGD2.17 (effective 10.7% discount to NAV) respectively. As such, we had thought the original offer of SGD2.22/share was fair (relative to our TP) and did not expect the offer to be raised, especially since the Independent Financial Adviser to CMA’s board had expressed the opinion that “the terms of the offer are fair and reasonable from a financial point of view in the context of a non-change of control transaction” in the circular to CMA’s shareholders dated 9 May 2014.

While the higher offer suggests the potential accretion to CAPL’s NAV as a result of the privatisation will be lower (based on our NAV estimate of SGD2.43/share for CMA, the expected accretion to CAPL will be lowered from 6.7Scts/share to 2.5Scts/share as the offer for CMA is raised from SGD2.22/share to SGD2.35/share on our calculation), the key rationale for the deal remains intact, that is: To benefit CAPL’s long term ROE; To streamline CAPL’s group structure; To provide a clearer investment proposition for CAPL.

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