(June 25): An investment firm owned by the five children of Thailand’s second-wealthiest person, Charoen Sirivadhanabhakdi, will buy hospitality assets worth S$1.1 billion (US$848 million or $1.1 billion) from the developer their family controls.
Singapore-listed Frasers Property Ltd said in exchange filings Thursday that the sale of its 63% stake in the five properties, which includes hotels in Singapore and Japan, will be conducted as part of a broader “optimisation” of a S$2.1 billion portfolio inherited from its privatisation last year of real estate investment trust Frasers Hospitality Trust.
Charoen with his family controls the bulk of the developer’s shares, which have a free float of roughly 11%. The billionaire’s five children already co-own the hospitality portfolio via the investment firm. They include Panote Sirivadhanabhakdi, Frasers’ chief executive officer, and his older brother Thapana, who sits on the board.
Other potential buyers that were discreetly sounded out didn’t show interest due to its pricing and Frasers’ requirement to continue managing the assets, said Kelvin Tan, head of real estate mergers and acquisitions at DBS Group Holdings Ltd, which advised on the deal. The buyers see any benefits Frasers gets from the deal accruing to them since they are the developer’s biggest shareholders, he said at a news briefing.
Panote and various interested parties recused themselves while other management and board members drove the process, said the group’s chief financial officer Loo Choo Leong. The deal will lighten the balance sheet, he said. Other moves include a carve out of SUS$300 million in assets to be sold opportunistically within the next two years.
The transactions are planned for completion by end-September and require minority shareholders’ approval. Shares of the firm rose as much as 4.7% before paring the gains.
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