The board of directors of Paragon REIT has appointed PrimePartners Corporate Finance as the independent financial advisor (IFA) on the ongoing privatisation offer, according to a bourse filing on Feb 14.
The IFA will make a recommendation to Paragon REIT’s minority unitholders in due course.
As a recap, Cuscaden Peak, the sponsor of Paragon REIT, is offering to privatise the REIT at 98 cents per unit. This represents 1.07 times price/adjusted NAV, and is at a 10.9% and 12.8% premium over the one-month and 12-month volume-weighted average prices.
Cuscaden Peak, held by Mapletree Investments and CLA Real Estate Holdings, became the sponsor of Paragon REIT in April 2022, after the completion of the acquisition of Singapore Press Holdings' non-media assets.
Paragon REIT now owns a portfolio of retail properties anchored by the shopping mall Paragon, alongside The Clementi Mall and Westfield Marion Shopping Centre in Australia.
According to the offerors' statement, Paragon REIT faces "trading conditions that constrain potential for sustained growth" and is heavily reliant on Paragon, which accounts for 72% of the REIT’s appraised value.
See also: To raise US$165 mil by mid-year, what will MUST divest next?
To "future proof" Paragon, the Cuscaden Peak expects to potentially spend $300 million to $600 million to refurbish the mall, which will take between three to four years to complete.
An EGM will be called in April to seek unit holders' go-ahead.
Units in Paragon REIT closed 0.5 cents lower or 0.503% down at 99 cents on Feb 14.
