SINGAPORE (BLOOMBERG) - Singapore-listed Frasers Hospitality Trust (FHT) is considering a plan to go private amid concerns that its share price does not reflect the company's value, people with knowledge of the matter said.
The real estate investment trust (Reit) has received board approval to explore a privatisation and hired a financial adviser, the people said, asking not to be identified because the matter is confidential. The company may choose not to proceed if the deal structure is not favourable, they added.
Shares of FHT spiked as much as 7.9 per cent last Friday (April 8), the most since November 2020, after the Bloomberg News report. The stock closed 5.3 per cent higher at 60 cents, giving it a market value of $1.16 billion. The benchmark Straits Times Index was down 0.6 per cent.
The move reflects the conundrum faced by Singapore's hospitality Reits, which have seen a sell-off as the pandemic battered the travel industry.
The country will take "a few years" to return to pre-Covid-19 tourism, Singapore Tourism Board chief executive officer Keith Tan said in a Bloomberg Television interview on Friday.
Frasers Hospitality Asset Management, which manages the Reit, said that from time to time, the managers review strategic options to enhance and unlock value for shareholders.
"There is no certainty or assurance that any transaction will result from such review, and the managers may decide to continue with FHT's existing business strategy," Frasers Hospitality Asset Management said on Friday in an exchange filing after Bloomberg submitted queries.
"No written proposals have been received and no decisions have been taken in this respect."
The trust comprises Frasers Hospitality Real Estate Investment Trust and Frasers Hospitality Business Trust stapled as one entity.
With a total portfolio valued at $2.25 billion, according to figures published on its website, FHT oversees 15 properties across Asia, Australia and Europe, including Fraser Suites Singapore and InterContinental Singapore.
The company reported higher revenue per average room across its Asia-Pacific and Europe portfolios, it said in its first-quarter business update in February.
