Straits Trading, following exceptional gains of more than $1 billion from the divestment of its stake in ARA Investment, is offering shareholders a distribution in specie worth some 50 cents per share.
Shareholders can choose between receiving 180 Straits Trading shares, or 145 ESR shares.
Last year, Hong Kong-based real estate manager ESR acquired ARA Investment for US$5.2 billion. Straits Trading held a stake of around one-fifth in ARA Investment.
The transaction was completed in Jan 20 and Straits Trading booked a gain of $142.5 million in cash plus 214.7 million ESR shares. The total gain of $1,076.5 million represented an 18.2% IRR, or 3.7 times equity multiple over Straits Trading’s original cost of investment in ARA.
According to Straits Trading, the dual arrangement of offering either Straits Trading's shares, or Hong Kong-quoted ESR shares, which closed at HK$19.86 on Aug 12, will give its shareholders the flexibility to choose how they would like to participate in Straits Trading’s growth.
“With the successful divestment of ARA, this special dividend serves to reward our shareholders for their continued support and enables them to participate further in our growth,” says Straits Trading’s executive chairman Chew Gek Khim.
“We are continuing our track record of rewarding shareholders with a special dividend whenever substantial shareholder value is unlocked,” she adds.
Straits Trading will call seek shareholders’ go-ahead for this proposal at an EGM to be called.
Straits Trading shares closed at $3.06, up 1.32%.