May 15, 2025

Frasers Property Revives Bid for Hospitality REIT Privatization

News Summary

Frasers Property Ltd., controlled by Thai billionaire Charoen Sirivadhanabhakdi, has launched a renewed attempt to privatize Frasers Hospitality Trust at a valuation of S$1.37 billion. The company already owns over 60% of the shares and is offering S$0.71 per share, a 7% premium over the last trading price. This bid follows a previous failed effort last year, with hopes that the current strategic review will aid in navigating economic challenges and securing shareholder approval for the buyout.

Singapore – Frasers Property Ltd., led by the influential Thai billionaire Charoen Sirivadhanabhakdi, has launched a renewed attempt to privatize its hospitality real estate investment trust (REIT), Frasers Hospitality Trust, with a valuation set at S$1.37 billion (approximately $1.1 billion). The company already holds more than 60% of Frasers Hospitality Trust’s shares and is now offering S$0.71 per share for the outstanding shares that are not owned by them.

This new offer comes with a 7% premium above the last traded share price of S$0.665 prior to a trading halt on May 13. Furthermore, it reflects a substantial 36.3% premium over the REIT’s 12-month volume-weighted average price. Including the stakes held by its affiliated entities, Frasers Property, which owns 24.23% of the trust, and TCC Assets — Sirivadhanabhakdi’s family conglomerate that controls 36.72% — stand in a strong position to propel the buyout forward.

The current proposal surfaces only a year after a failed attempt at privatization in 2022, when the same company garnered just 74.9% approval from shareholders, short of the required 75%. This prior effort had offered S$0.70 per stapled security, valuing Frasers Hospitality Trust at S$1.35 billion.

Strategic Review Factors

The renewed push for privatization follows a comprehensive strategic review by the trust’s directors, who have taken into account the challenging macroeconomic environment, which includes factors such as currency depreciation and rising global inflation. The proposed buyout is designed to achieve financial stability and operational flexibility for the REIT amid these adversities.

Frasers Hospitality Trust Overview

Frasers Hospitality Trust is known for its diverse portfolio of 14 hotels and serviced residences located across nine cities in Asia, Australia, and Europe. Notable properties within this portfolio include the InterContinental Singapore, Fraser Suites Sydney, and Park International London. Frasers Hospitality Trust holds a significant market capitalization of approximately S$1.27 billion and boasts an asset portfolio valued at around S$2 billion as of September 2024.

Approval Process

The proposed privatization scheme requires several steps before it can materialize, including regulatory and court approvals, along with the backing of a majority of stapled security holders. Frasers Property’s extensive asset base, amounting to approximately S$38.9 billion as of March 31, extends beyond hospitality to include various sectors such as residential and industrial real estate across regions including Southeast Asia, Australia, Europe, and China.

This strategic move for privatization underlines the significant potential of Frasers Hospitality Trust as it navigates through market fluctuations and economic challenges, seeking to enhance its position and performance in an increasingly competitive industry.