Accordia Golf Trust offered $804m by sponsor to divest all its Japan golf courses; be voluntarily wound up

AGT received a non-binding proposal to buy over its interests in all of its golf courses. PHOTO: ST FILE

SINGAPORE (THE BUSINESS TIMES) - The sponsor of Accordia Golf Trust (AGT) has proposed to acquire the trust's 88 golf courses in Japan for $804.1 million, or an implied purchase consideration of $0.732 per unit, it said on Monday (June 29).

The price represents a premium of 5.1 per cent and 12.9 per cent over AGT's adjusted net asset value of 58.8 billion yen($764.9 million) and adjusted net tangible assets of 54.7 billion yen as at March 31.

The price also represents a premium of 21.8 per cent over the volume-weighted average price of AGT units in the one month prior to and including the closing unit price of $0.60 on Nov 27, 2019. That was the day before AGT announced that it had received a non-binding proposal to buy over its interests in all of its golf courses.

Sponsor Accordia Golf plans to acquire all membership interests in, and assume the debts, of Accordia Golf Asset Godo Kaisha (SPC), the holding company which holds the golf courses. AGT will thus receive the full consideration of $804.1 million from Accordia Golf and will not need to apply any of this amount towards the repayment of SPC's debts.

AGT said it intends to distribute the net proceeds from the proposed divestment via special distributions, after setting aside fees and expenses that are expected to comprise 3 per cent of the $804.1 million purchase consideration.

It will not be meaningful for AGT to maintain its listing on the Singapore Exchange (SGX) after the asset sale, the trustee-manager noted, as AGT will cease to have any operating business and will be deemed to be a cash trust.

As such, the trustee-manager intends to undertake a voluntary winding up of AGT.

The proposed acquisition is conditional upon approval from AGT unitholders by Sept 14, at an extraordinary general meeting (EGM) that will be convened in due course.

Accordia Golf, which holds 28.85 per cent of all units in AGT and 49 per cent of the shares of the trustee-manager, will abstain from voting on the resolution related to the proposed acquisition at the EGM.

CIMB Bank has been appointed the independent financial adviser (IFA) for the purposes of the proposed divestment as an interested-person transaction. The IFA's opinion will be set out in a circular to be despatched to unitholders in due course.

AGT's independent committee said on Monday that the trust's trading volume on the SGX has been historically low, so the proposed divestment enables unitholders to realise value for their units now.

AGT has not made any acquisitions to drive growth since its listing, they added. While SPC had from time to time evaluated suitable golf course acquisitions, it was difficult for SPC to raise accretive financing to make the acquisitions and consequently, it never proposed any acquisitions to the trustee-manager, the independent committee said.

"AGT may face further difficulty in obtaining financing for golf course acquisitions (as a result of the Covid-19 outbreak), limiting AGT's ability to improve its distribution per unit (DPU)," AGT said in a statement.

Accordia Golf also noted that AGT's historical DPU has fallen over time and its offer to buy out AGT's golf courses represents an opportunity for unitholders to cash out.

Accordia Golf Trust called for a trading halt on Monday morning before the offer was announced. The units last changed hands at $0.64 on Friday.

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