Controlling shareholders make S$1.78 per share buyout offer for ARA Asset Management

SINGAPORE - ARA Asset Management has announced that a group of investors including the Straits Trading Company, Cheung Kong Property Holdings, American private equity firm Warburg Pincus and AVIC Trust Co, as well as ARA founder and group chief executive John Lim have launched an offer to privatise the company.

The group is offering S$1.78 in cash for each share of ARA, in a deal valuing the company at S$1.775 billion.

The offer price represents a premium of 43.9 per cent over the 12-month volume-weighted average price up to and including November 2.

Shares in the real estate fund manager last traded at S$1.495 last Thursday, jumping 8.5 cents, or 6 per cent before a trading halt was called.

The buyout will be carried out by way of a scheme of arrangement.

This means that the offeror will hold a scheme meeting at a later date, where it needs more than 50 per cent of shareholders present in person or by proxy to vote "yes" to the scheme.

These shareholders will also have to hold at least 75 per cent of the value of total shares held by all at the meeting.

If the acquisition goes through, Mr Lim's JL Investment Group will hold 19.85 per cent of ARA. Straits Trading will hold 20.95 per cent and Cheung Kong Property will hold 8 per cent.

Warburg Pincus will be the largest shareholder with a 30.72 per cent stake, and AVIC Trust will have the second largest stake at 20.48 per cent.

Also on Tuesday, ARA reported an 84 per cent jump in net profit to S$31.5 million in the third quarter from the same period a year ago, due mainly to higher distribution income from units of Suntec Reit accumulated, as well as from ARA's investment in private real estate funds.

Revenue in the three months ended Sept 30 climbed 39 per cent to S$53 million.

Third quarter earnings per share was 3.16 cents, up from a restated 1.97 cents in the same quarter last year. Net asset value per share was 56.2 cents as at Sept 30, up from 52.17 cents as at Dec 31 last year.

ARA had S$30 billion assets under management (AUM) as at Sept 30. The investment into Century Link announced on Oct 26, which will be completed by December, will add another S$4.1 billion to the group's AUM.

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