Singapore's CapitaLand to split, form listed investment business (updated)

CapitaLand China Trust

22/03/2021 01:37

* Property development business to be taken private
    * Investment management ops, REITs to be in listed entity
    * Shareholders to get implied consideration of S$4.102/share
    * Deal implies 24% premium to CapitaLand's last trade price

 (Adds analyst comment, paragraph 6)
    By Aradhana Aravindan and Anshuman Daga
    SINGAPORE, March 22 (Reuters) - Singapore's CapitaLand plans
to split in two, with its real estate investment management
business becoming the world's third largest as a new listed
entity and its property development business to be taken
private.
    CapitaLand  CATL.SI , which is 52% owned by Singapore state
investor Temasek, said it aims to achieve higher valuations for
the investment management business which will no longer be
hobbled by the intensive capital needs of development.
    The restructuring comes after CapitaLand, which operates in
Singapore, China, India and other markets, posted its biggest
loss in 2020 due to the coronavirus pandemic.
    "The overarching objective of the scheme is to sharpen the
group's focus and position it to be an asset-light and
capital-efficient business," CapitaLand said in a statement on
Monday.
    The new listed company, CapitaLand Investment Management
(CLIM), will house its stakes in its real estate investment
trusts, funds as well as its lodging business.
    Brandon Lee, an analyst at Citi said in a note that early
investor feedback was mixed, with questions around valuation
multiples for CapitaLand's development business, valuation
multiples for CLIM and the timing of the restructuring.
    CLIM, which will be listed in Singapore, is expected to be
Asia's largest real estate investment manager with assets under
management of about S$115 billion ($86 billion), it added.
    Shareholders will receive an implied consideration of
S$4.102 per share in cash and scrip, including a one-for-one
equivalent stake in CLIM. That is 24% above the last traded
price of CapitaLand and implies a deal value of about S$21.3
billion ($15.9 billion).
    The real estate development business will become part of CLA
Real Estate Holdings, a Temasek unit. It will hold a 51.8% stake
in CLIM and continue to develop projects for CLIM.
    The deal is expected to be completed in or around the fourth
quarter of 2021.
    Trading in CapitaLand's shares and units of the REITs were
halted and trading will resume on Tuesday.
    Its Singapore-listed REITs are Ascott Residence Trust
 ASCO.SI , CapitaLand Integrated Commercial Trust  CMLT.SI ,
Ascendas  AEMN.SI , CapitaLand China Trust  CAPA.SI  and
Ascendas India Trust  AINT.SI .
    CapitaLand had a market value of around $13 billion as of
Friday's close. The REITs had a combined market value of $25 
billion.
    JP Morgan is advising CapitaLand and DBS Bank CLA Real
Estate.
    In 2019, CapitaLand completed an S$11 billion cash-and-stock
deal to acquire Temasek's shares in Ascendas-Singbridge, which
owned logistics and industrial assets.
 ($1 = 1.3422 Singapore dollars)

 (Reporting by Aradhana Aravindan and Anshuman Daga; Editing by
Muralikumar Anantharaman and Edwina Gibbs)
 ((aradhana.aravindan@thomsonreuters.com;))