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Reports » Singapore

Singapore stock market and companies daily report (PTT International, REIT, TA Corporation) (September 24, 2012)

September 24, 2012, Monday, 04:46 GMT | 00:46 EST | 09:16 IST | 11:46 SGT
Contributed by Shares Investment

Sakari’s IDs Find PTT Int’l’s Offer “Reasonable But Not Compelling”
In what appears to be a slight put-down of majority shareholder, PTT International’s mandatory cash offer, Sakari Resources’ independent directors issued a circular today that they found the offer “reasonable but not compelling”. In the aftermath of PTT’s $1.2 billion cash offer, Sakari had hired Ernst & Young as independent financial adviser (IFA) for its independent directors (IDs). In IFA’s letter to Sakari’s IDs, the IFA was of the view that the offer is, “on balance, reasonable but not compelling”. It had based its advice on market, economic, strategic and other relevant conditions, it had also taken into consideration the joint venture agreement between Sakari and Royal Group of companies in Cambodia as well as a Heads of Agreement to acquire in Indonesia. The IFA further advised the IDs to recommend that shareholders accept or reject the offer based on their short or long term view of the company. Sakari’s IDs subsequently advised shareholders who hold a shore term-view as well as wish to realise their investments in the near term to accept the offer. However, for shareholders who hold a long-term view of their investments and/or confident and optimistic of Sakari’s business development and operational initiatives should reject the offer.
Significance: As of 20 September-2012, PTT had already accumulated 69 percent of Sakari. With the release of recommendations from Sakari’s IDs, valid acceptances from existing shareholders could see further movement either way.

First REIT Acquires Various Indon Properties For $143m
First Real Estate Investment Trust’s (REIT’s) manager announced that it had entered into agreements to acquire two new properties in Indonesia. The proposed acquisition comprises of an integrated hospital and hotel in Manado, and another hospital in Makassar in Sulawesi. The acquisitions, which was signed with PT Lippo Karawaci TBK (First REIT’s sponsor), amount to approximately $142.9 million and will increase First REIT’s total asset size to $782.2 million. In its media communiqué, the trust said that based on the average valuations of Knight Frank and CB Richard Ellis, the Manado and Makassar properties will be acquired at a discount of 10.8 percent and 9.8 percent respectively. First REIT and PT Lippo Karawaci TBK also signed conditional master lease agreements for lease terms of 15 years, with an option to renew for a further term of 15 years. This agreement will help the trust benefit from stable gross rental income over the next 15 to 30 years (if the option is exercised).
Significance: The acquisitions will help enhance the trust’s growing portfolio of healthcare assets in Indonesia, Singapore and South Korea. It is also seen to help strengthen its income streams as well as enhance overall capital management flexibility due to the increase in the trust’s absolute size.

TA Corp’s Gambir Ridge See Robust Demand
Local property developer, TA Corporation announced that its latest development, Gambir Ridge received good demand during its preview on 21 September-2012. In fact, the 77-unit freehold development sold over 90% of units in its preview. TA Corp said that the units sold were priced at above $1,400 per square foot, with the signing of Option to Purchase contracts, comprising of a mix of one-to-four-bedroom units. Neo Tiam Boon, TA Corp’s chief executive officer said that the company is “deeply encouraged by the overwhelming response” at the preview, and that it “attests to our (TA Corp’s) confidence that Gambir Ridge is an attractively priced development”. Gambir Ridge sits at an attractive location, with retail and dining options nearby as well as reputable schools. In addition the development is in close proximity to public transport nodes for ease of accessibility.
Significance: Gambir Ridge will mark TA Corp’s second property project to hit the market this year, after launching The Cristallo, a 74-unit freehold development in March 2012.