SINGAPORE (Sept 3): PrimePartners Group, the independent financial adviser (IFA) to minority shareholders of Wheelock Properties (S), recommended in its offer document on Aug 24 that shareholders accept the $2.10 offer from Wheelock and Co unless they are able to obtain a higher price on the market. Wheelock and Co own 911.92 million shares, or 76.21%, of Wheelock Properties. It is likely to cost Wheelock and Co $597.7 million to acquire the 284.63 million shares in Wheelock Properties it does not already own. As at June 30, Wheelock Properties had $853 million in cash, and its net asset value (NAV) stood at $2.60.
In the offer document, PrimePartners used certain assumptions to lower the revalued NAV of Wheelock Properties from $2.60 to $2.50. That translates into a 16% discount to RNAV of the offer price (see Table 1), the IFA says. Is that a fair valuation? In general, property stocks trade at discounts to RNAV of 15% to 30%. The RNAV calculation by the IFA implies that the offer is reasonable. But property companies have been privatised at higher price-to-book ratios than the 0.8 times Wheelock and Co is offering (see Table 2).
