Sabana Shari'ah REIT

[weijian]

Blackwood is one of the 3 owners of the Manager (Sabana Real Estate Investment Management) and this probably is the prelude for Vibrant to sell off to ESR.

TRANSACTION IN RELATION TO SHARES IN THE MANAGER

http://infopub.sgx.com/FileOpen/Sabana_S...eID=534836

http://www.sabana-reit.com/the-manager.html

[opmi]

Tycoon also selling REITs

ESR
https://links.sgx.com/1.0.0/corporate-an....final.pdf

Sabana
https://links.sgx.com/1.0.0/corporate-an...47c1ade7a4

IREIT - cleared
https://links.sgx.com/1.0.0/corporate-an...U958PA1NP3

[weijian]

There goes the Shariah compliant....But nonetheless, from cost perspective, sensible move.

ESR-REIT and Sabana REIT Announce Proposed Merger

The ESR-REIT Manager does not intend to retain Sabana REIT's Shari'ah compliant status

Announcement: https://links.sgx.com/FileOpen/Joint_Ann...eID=623897
PR: https://links.sgx.com/FileOpen/PressRele...eID=623899
Presentation: https://links.sgx.com/FileOpen/SabanaREI...eID=623898

[Gaudente]

There goes the Shariah compliant....But nonetheless, from cost perspective, sensible move.

ESR-REIT and Sabana REIT Announce Proposed Merger

The ESR-REIT Manager does not intend to retain Sabana REIT's Shari'ah compliant status

Announcement: https://links.sgx.com/FileOpen/Joint_Ann...eID=623897
PR: https://links.sgx.com/FileOpen/PressRele...eID=623899
Presentation: https://links.sgx.com/FileOpen/SabanaREI...eID=623898

so I invested in Sabana because of its discount to NAV and now I get for each Sabana with 53 cents NAV 0.94 ESR with a NAV of 41 cents ? 
Another great deal from the Singapore Thieves Market 

[weijian]

There goes the Shariah compliant....But nonetheless, from cost perspective, sensible move.

ESR-REIT and Sabana REIT Announce Proposed Merger

The ESR-REIT Manager does not intend to retain Sabana REIT's Shari'ah compliant status

Announcement: https://links.sgx.com/FileOpen/Joint_Ann...eID=623897
PR: https://links.sgx.com/FileOpen/PressRele...eID=623899
Presentation: https://links.sgx.com/FileOpen/SabanaREI...eID=623898

so I invested in Sabana because of its discount to NAV and now I get for each Sabana with 53 cents NAV 0.94 ESR with a NAV of 41 cents ? 
Another great deal from the Singapore Thieves Market 

If investing in discount to NAV stocks is a sure-win way, or to a lesser extent a highly probable way to earn money - then i guess there wouldn't be so many people trying to peddle their secrets of how to earn money.

I think as an OPMI, we may have to be able to differentiate between our ability to take risk and our desire for profits. Sometimes, when i say i have an appetite for risk, i realized later on that it was just an euphemism (created exclusively by myself for myself) to disguise the desire for profits.

But make no mistake, I still believe there is some truth about investing profitably based on "discount to NAV". But for a start, I will have to make sure I do not get anchored by a NAV number that could turn out to be a mirage, due to a misalignment in incentives (ditto to Activist Speaks for digging these out in the earlier Sabana REIT posts)

https://www.valuebuddies.com/thread-75-p...#pid158876

[valueinvestsg]

Hi all,

We are setting up a community for Sabana unitholders to discuss about the transaction. If you are interested to be added to the community/updates, Please email to:

savesabanareit@gmail.com

to receive more information.

Thank you.

[weijian]

To be honest, Quarz should know that only high quality assets will trade at or above NAV for REITS (based on the way that REITs does their accounting). The Market is not stupid.

I reckon that they are just pushing for a better deal since the interested parties can't vote and this is done as a SOA with a 75% hurdle.

Quarz to Sabana Reit manager: Will you sell your personal property at a 25% discount to book?

NOT everyone is pleased with ESR-Reit’s offer to buy out unit holders of Sabana Reit, and one investor is arguing that the implied offer price – which represents a 26 per cent discount to Sabana Reit’s book value – is too low.

Activist fund Quarz Capital Management told The Business Times on Thursday: “Unless the management of Sabana Reit’s manager shows that they are willing to sell their personal properties at a 25 per cent discount to valuation, we are puzzled why they would propose to merge Sabana Reit at a 25 per cent discount to book value.”

https://www.businesstimes.com.sg/compani...5-discount

Quartz Nov2019 appeal to merge at NAV: https://www.quarzcapital.com/en/research/sabana-reit

[ACTIVIST SPEAKS]

To be honest, Quarz should know that only high quality assets will trade at or above NAV for REITS (based on the way that REITs does their accounting). The Market is not stupid.

I reckon that they are just pushing for a better deal since the interested parties can't vote and this is done as a SOA with a 75% hurdle.

Quarz to Sabana Reit manager: Will you sell your personal property at a 25% discount to book?

NOT everyone is pleased with ESR-Reit’s offer to buy out unit holders of Sabana Reit, and one investor is arguing that the implied offer price – which represents a 26 per cent discount to Sabana Reit’s book value – is too low.

Activist fund Quarz Capital Management told The Business Times on Thursday: “Unless the management of Sabana Reit’s manager shows that they are willing to sell their personal properties at a 25 per cent discount to valuation, we are puzzled why they would propose to merge Sabana Reit at a 25 per cent discount to book value.”

https://www.businesstimes.com.sg/compani...5-discount

Quartz Nov2019 appeal to merge at NAV: https://www.quarzcapital.com/en/research/sabana-reit

And also this scheme is not that different from the one proposed by Quartz in Nov 19

[weijian]

So ESR tries to reset the narrative - This is NOT a sale. This is a merger at fair valuation based on what the market price indicated.

RESPONSE TO BUSINESS TIMES ARTICLE

It is important to note that the existing Sabana REIT portfolio has consistently traded at a discount to NAV in recent years – in the same BT article, DBS Group Research observed that Sabana REIT has traded with a five-year mean discount to NAV of 26.4%

https://links.sgx.com/FileOpen/Sabana_SG...eID=626286

[valueinvestsg]

https://www.businesstimes.com.sg/compani...esr-merger

https://www.savesabanareit.com/open-letters

https://en.prnasia.com/releases/apac/qua...7510.shtml

FUND managers Quarz Capital Management and Black Crane Capital said in an open letter on Friday that they intend to vote against the proposed merger of Sabana Shari'ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) and ESR-Reit.


The funds and entities that both Quarz and Black Crane act for and advise collectively own more than 10 per cent of the units of Sabana Reit.

At the current transaction terms of 0.94 ESR-Reit unit for one Sabana Reit unit, both managers argued that Sabana Reit is undervalued. They added that they are working on alternative options to the merger, and intend to present them to fellow unitholders shortly.

"As the biggest independent unitholders who are not conflicted in the transaction, we are open for constructive negotiation with the bidder for a proposed takeover price in line with Sabana's NAV (net asset value)," they added.

We invite all Sabana unitholders to visit WWW.SAVESABANAREIT.COM for more information on the transaction. 

In their letter on Friday, Quarz and Black Crane said the merger is being executed at a "substantial" 26 per cent discount to Sabana’s NAV as at June 30 and a 34 per cent discount to its NAV as at December 2019.

"The historical discount to NAV can potentially be attributed to poor management decisions both under the sponsorship of the Vibrant Group and now under the conflicted sponsorship of ESR," they said.

As ESR Cayman is the controlling shareholder of both the managers of Sabana Reit and ESR-Reit, the proposed merger "appears to be a bold attempt by ESR to potentially solve the conflict of interest issue at the expense of Sabana unitholders," they added.

Describing the merger as "opportunistically timed during the Covid-19 crisis", the firms pointed out that the merger offer was made a year after ESR Cayman had bought a substantial stake in Sabana Reit and a controlling stake in the Reit's manager at a "rich" premium from the same vendor.

They noted that Sabana Reit's rental income in H1 "demonstrated resilience", declining just 7 per cent on a year-on-year basis despite providing rental rebate to its tenants.

"Given Sabana’s strong balance sheet, there is no imperative for Sabana to undertake a merger at this time," the firms said.
"It is thus hard to comprehend why Sabana’s board and management would propose to 'panic-sell' at a substantial discount to book value, which has been very conveniently and temporarily reduced from S$0.57 to S$0.51 per unit by the weaker market sentiments due to Covid-19.