On Jan 3 and 4, the first two trading sessions following the announcement that Mapletree Commercial Trust’s (MCT) and Mapletree North Asia Commercial Trust (MNACT) planned a merger to create Mapletree Pan Asia Commercial Trust (MPACT), MCT’s unit price dived some 8% in two days before stabilising. Investors viewed the merger as MCT “saving” MNACT which had challenges in 2019 and 2020. MNACT’s largest asset, Festival Walk in Hong Kong, was damaged by the mass protests of 2019 and negatively impacted by the pandemic in 2020.
The merger will be effected by a scheme of arrangement (SOA). MNACT unitholders will receive a scheme consideration of $1.1949 to be satisfied by either 0.5963 new MCT units at an issue price of $2.0039 per MNACT unit (scrip only) or a combination of 0.5009 new MCT units and $0.1912 in cash (scrip and cash). The aggregate scheme consideration is $4,215.6 million. The EGMs are likely to be held in April with the merger effected by the end of May or early June.
To make the acquisition of MNACT more palatable to MCT’s minority unitholders, the manager of MCT announced that it would waive 100% of the acquisition fee associated with MCT’s merger with MNACT. In addition, MPACT will adopt MNACT’s fee structure instead of keeping with MCT’s fee structure.