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Why CapitaLand's purchase of Ascendas-Singbridge isn't fair to minorities, and what can be done about it

Ben Paul
Ben Paul4/8/2019 08:00 AM GMT+08  • 6 min read
Why CapitaLand's purchase of Ascendas-Singbridge isn't fair to minorities, and what can be done about it
SINGAPORE (April 8): CapitaLand has made a convincing case for why its proposed acquisition of the Ascendas-Singbridge group from Temasek Holdings is in its long-term interest. But it hasn’t demonstrated that its minority investors are being treated fai
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SINGAPORE (April 8): CapitaLand has made a convincing case for why its proposed acquisition of the Ascendas-Singbridge group from Temasek Holdings is in its long-term interest. But it hasn’t demonstrated that its minority investors are being treated fairly in the transaction. Temasek quite obviously benefits at their expense.

CapitaLand has proposed to acquire Ascendas-Singbridge for almost $6.036 billion, to be satisfied by an equal proportion of cash and new shares priced at $3.50 each. The price tag for Ascendas-Singbridge was reached by valuing its stakes in its real estate investment trusts (REITs) at market prices, coming up with an agreed fair value for its funds management business, and considering the net asset value of its remaining businesses.

On the other hand, CapitaLand will be issuing new shares to Temasek at a price that is more than 20% below its net tangible assets (NTA) of $4.40 per share, as at end-2018. (In fact, the price at which it is issuing new shares is also now below its market price of $3.65, though it was more than 7% above its market price just before the deal was announced).

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