SINGAPORE - Thai billionaire Charoen Sirivadhanabhakdi’s Frasers Property is making a second attempt to take private its hospitality real estate investment trust at a valuation of $1.37 billion.

The company on May 14 announced an offer of 71 cents per share for Frasers Hospitality Trust (FHT).

This represents a 7 per cent premium to FHT’s last traded price of 66.5 cents before the counter announced a trading halt on May 13. It is also a 36.3 per cent premium to the FHT’s volume weighted average price for the 12-month period up to the last trading date.

Frasers Property owns a 24.23 per cent stake in FHT, while its majority shareholder and Mr Charoen’s family conglomerate TCC Assets has a 36.72 per cent stake.

An attempted privatisation in 2022 at 70 cents a share – which valued FHT then at $1.35 billion – failed when it fell short of a 75 per cent shareholder threshold required.

The latest offer to take the trust private is the outcome of a strategic review conducted by the directors of the trust after they evaluated various options, both companies said in a joint statement.

They cited challenges due to the changing macroeconomic environment, such as a weaker foreign exchange rate against the Singapore dollar, higher interest rate environment, global cost inflation and unforeseen events such as Brexit and the Covid-19 pandemic.

“The directors view the privatisation as a viable option for stapled security holders to immediately realise their investment at a premium to net asset value and offers strong deal certainty in terms of timing and execution,” they said.

“Frasers Hospitality Trust is expected to continue to face both macroeconomic headwinds and structural limitations which may limit its ability to grow its distribution per stapled security and net asset value,” they added.

The hospitality trust’s smaller size relative to its peers has also contributed to a higher cost of equity and lower debt headroom, which limits its ability to scale up, they said.

Its properties are also located in areas where the currencies have depreciated significantly – by 20 per cent to 30 per cent – against the Singapore dollar since its listing, they noted.

FHT has a portfolio of 14 hotels and serviced residences across nine cities in Asia, Australia and Europe. The properties include InterContinental Singapore, Fraser Suites Sydney and Park International London.

Listed on the Singapore Exchange mainboard since ...