SINGAPORE (THE BUSINESS TIMES) - Unit holders of Ara Logos Logistics Trust and ESR-Reit will get to vote on the proposed merger of the two real estate investment trusts (Reits) on March 21, the Reits announced on Friday (Feb 25).
ESR-Reit will go first at an extraordinary general meeting (EGM), held via electronic means, at 10am on March 21.
This will be followed by Ara Logos' virtual EGM at 3pm on the same day.
The scheme meeting between the two Reits' managers and trustees will then take place at 3.30pm, following the conclusion of the EGMs.
In separate statements on Friday, both Reit managers have reiterated the illustrative value of the merger and recommended that unit holders vote in favour of it.
Mr Adrian Chui, chief executive officer and executive director of ESR-Reit's manager, said: "This merger is critical as it addresses the issue of overlapping mandates and potential conflicts while allowing the enlarged ESR-Logos Reit to leverage the sponsor's resources to drive our growth trajectory, thereby safeguarding the interest of both sets of unit holders."
Ms Karen Lee, CEO of the manager of Ara Logos, said: "This proposed transaction is intended as a strategic merger and not a complete sell-out of Ara Logos and/or its underlying assets, as we believe the proposed merger will allow our unit holders to enjoy multiple benefits, which one cannot enjoy in a direct sell-out."
The Reits also issued a revised scheme document on Friday, detailing the scheme consideration of 9.7 cents in cash and 1.7729 new ESR-Reit units for each Ara Logos unit that Ara Logos unit holders will receive should the merger proceed.
To disseminate information to unit holders and answer questions, the managers of Ara Logos and ESR-Reit have organised separate virtual information sessions about the merger, each to be facilitated and moderated by the Securities Investors Association (Singapore).
Ara Logos' information session will take place on March 9 from 7pm, while ESR-Reit's session will be held on March 10 from 7pm.
Both sessions will include the respective CEOs of the Reit managers delivering a presentation on the proposed merger, followed by a live question-and-answer session.
The proposed merger was first announced on Oct 15, 2021, following completion of the merger of the two Reits' sponsors, ESR Cayman and Ara Asset Management.
It had initially come with a lower scheme consideration of 9.5 cents in cash and 1.6765 in ESR-Reit units for every Ara Logos unit. However, after proxy advisory services Glass Lewis and Institutional Shareholder Services recommended that Ara Logos unit holders vote against the merger, the scheme consideration was raised by 2 per cent to the current amount.
The proxy advisers had cited process and pricing issues, with Glass Lewis saying the terms of the scheme consideration was unfavourable to Ara Logos unit holders as they imply a discounted market valuation for their units.
On Thursday, ESR-Reit units closed down two cents or 4.5 per cent to 42.5 cents, while Ara Logos units ended at 83 cents, down three cents or 3.5 per cent.