Reverse takeover of Saizen Reit proposed

Saizen Reit will acquire Malaysian conglomerate Sime Darby's Australian industrial properties in a process that involves a reverse takeover of the real estate investment trust.

Under the deal, a Sime Darby unit will sell its industrial properties in Australia to Saizen Reit.

The properties will then be leased back to that Sime Darby unit, which sells, rents and services Caterpillar products.

Another Sime Darby unit, Sime Darby Property Singapore, will then be issued new units in Saizen Reit. It will also acquire an 80 per cent stake of the Reit's manager.

The transaction is in line with Sime Darby's strategy to develop a Reit platform, the company said in a Bursa Malaysia filing.

The deal has surprised some market watchers as Saizen had appeared on track for a delisting after selling its entire portfolio of real estate assets in March.

Its Reit manager said last month it had received a proposal for a transaction but would start liquidation proceedings if it did not come off.

The manager said in a Singapore Exchange filing that after it had sold its portfolio, the Reit ceased to have any operating business and exists now as a cash trust.

"Most of the proceeds from the disposal were paid out to unit holders via a special distribution of $1.056 per unit in March," it stated. "The proposed properties acquisition will provide an opportunity for Saizen Reit to venture into a new business area."

Experts said the proposed takeover is likely an isolated instance. Mr Derek Tan, DBS vice-president for group equity research, added: "This reverse takeover will probably be specific to Saizen Reit as the new investors take advantage of a listed vehicle to inject a portfolio of industrial assets into it."

Saizen Reit units closed up 2.3 cents to 12.1 cents yesterday.

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A version of this article appeared in the print edition of The Straits Times on August 16, 2016, with the headline Reverse takeover of Saizen Reit proposed. Subscribe