CapitaLand announced today it has entered into a transaction with Temasek to acquire from its subsidiary, Ascendas-Singbridge Pte Ltd (“ASB”), all the shares in the two wholly owned intermediary subsidiaries of ASB.
The proposed transaction is valued at S$11 billion and is subject to approval by CapitaLand’s independent shareholders at an Extraordinary General Meeting (“EGM”), expected to be convened by 1H 2019.
CapitaLand says the effect of the new deal “will be to create the largest diversified real estate group in Asia.”
As a result of the transaction, the combined total assets under management (AUM) of the Group will exceed S$116 billion, CapitaLand says.
Under the terms of the agreement, Temasek will effectively receive S$6.0 billion, which will be satisfied 50% in cash (S$3.0 billion) and 50% in new CapitaLand shares (S$3.0 billion).
The shares will be priced at S$3.50 per share, representing a premium of 11.3%, or approximately S$0.36, over CapitaLand’s one-month volume weighted average price of S$3.1447.
Temasek’s ownership of CapitaLand will increase from approximately 40.8% to about 51.0% upon the close of the Transaction.
Commenting on the Transaction, Mr. Ng Kee Choe, Chairman of the Board of CapitaLand Limited, said: “Our complementary strengths position us strongly for growth amidst the changing real estate environment in Singapore and internationally.”
He said the transaction represents a compelling opportunity to realize benefits not available to each company on a standalone basis.
“We will have more opportunities to create enhanced value for our shareholders. And with multiple platforms across the various sectors and geographies, we will be able to offer attractive career opportunities for our staff.”
Mr. Wong Kan Seng, Chairman of Ascendas-Singbridge Pte Ltd, said: “As Asia’s leading integrated business space and innovative urbanization solutions provider, ASB’s rapidly growing business is highly complementary to CapitaLand’s.”
He said the combined scale and expertise of the Group would enable it to better capitalize on the opportunities arising from the rapid pace of urbanization in the region.
He said ASB’s established relationships with local governments and business communities would also enable the Group to develop urban solutions that adequately address local initiatives and requirements across the region.
CapitaLand announced in an analysis report that it would receive several benefits from the deal. Among them, the Group will have immediate scale and capabilities in the logistics/business park sector through developer-owner-operator platforms with established track records.
Also, with 31 REITs and private funds under its belt, the Group will become one of the top 10 largest real estate investment managers globally3 and the largest in Asia.