Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Soilbuild Business Space REIT — Merger or Acquisition (December 2020)
27 slides from Singapore Exchange's merger presentation, Dec 14, 2020
Slide 1: Soilbuild Business Space REIT Buyout and Privatisation by Blackstone and LCH
DRAFT Soilbuild Business Space REIT Buyout and Privatisation by Blackstone and LCH 14 December 2020
Slide 2: Disclaimer
Disclaimer NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION. THIS PRESENTATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITI
Slide 3: Content
Content Introduction to the Transaction 4 Transaction Summary 6 Offeror’s Transaction Rationale 10 Financial Evaluation of the Trust Scheme 17 Timeline and Approvals Required 24 3
Slide 4: Introduction to the Transaction
Introduction to the Transaction 4
Slide 5: Introduction to the Transaction
Introduction to the Transaction 1 The growth of SB REIT has been impacted by challenging market conditions ● Since the initial public offering (“IPO”) of SB REIT, the board of directors and the management have remained committed to the growth and optimisation of SB REIT’s portfolio to maximise value
Slide 6: Transaction Summary
ap (Build 6 SOITTTTE PEMD 7 WEE IIIT ETAERME GUE LMT TILIIM EEE MEME EE CLMTTEE EME MAE ii CLEAR EMD EM EG Ei
Slide 7: Transaction Summary
Transaction Summary • Clay Holdings III Limited (the “Offeror”) Offeror – An entity wholly-owned by Clay Holdings II Limited (“HoldCo”), which is owned by Clay Holdings I Limited (“BX SPV”) and LCH Buyout and privatisation of SB REIT, to be effected through: • The proposed acquisition of all the iss
Slide 8: Transaction Summary: Australian Asset Disposal
Transaction Summary Australian Asset Disposal • The Trust Scheme is conditional upon, inter alia, the completion of the sale of SB REIT’s Australian Assets to Clay SG Holdings II Pte. Ltd. and Clay SG Holdings III Pte. Ltd. • The Australian Asset Disposal is intended to effect the proposed acquisiti
Slide 9: Pro-forma Unitholding and Corporate Structure of SB REIT
Transaction Summary Pro-forma Unitholding and Corporate Structure of SB REIT Structure of SB REIT immediately before the Transaction Structure of SB REIT immediately after the Transaction Lim Chap Lim Chap Other SB Lim Chap BX SPV BX SPV Huat Huat Unitholders Huat 69.72% 30.28% 30.28%(1) 69.72% 30.2
Slide 10: Offeror's Transaction Rationale
Offeror’s Transaction Rationale 10
Slide 11: Offeror's Transaction Rationale
Offeror’s Transaction Rationale Growing SB REIT through DPU accretive acquisitions requires its DPU yield to trade sufficiently low as well as its ability to A effectively raise capital and debt to fund such acquisitions B Due to constraints faced, SB REIT has lagged in growth compared to its indust
Slide 12: Opportunity for SB Unitholders to Exit SB REIT: Growth Constraints
1 Opportunity for SB Unitholders to Exit SB REIT Growing SB REIT through DPU accretive acquisitions requires its DPU yield to trade sufficiently low as well as its ability to effectively raise capital to fund such acquisitions Equity Issuances since IPO Debt Headroom(1) (S$mm) (S$mm) • SB REIT has a
Slide 13: SB REIT assets grown 1.5x versus peer average 1.8x
1 Opportunity for SB Unitholders to Exit SB REIT Due to constraints faced, SB REIT has lagged in growth compared to its industrial S-REITs peers. Since its IPO in August 2013, SB REIT’s assets have only grown 1.5x, compared to the average of 1.8x of its peers Total Assets Growth(1)(2) Average: 1.8x
Slide 14: SB REIT Free Float vs EPRA Nareit Free Float Entry Requirement
1 Opportunity for SB Unitholders to Exit SB REIT Consequently, SB REIT still has a long way to go before index inclusion. Most of the large cap REITs trade at lower DPU yields partly because they are part of key REIT indices which is likely to confer better trading liquidity, larger institutional fo
Slide 15: Unit price underperformance, analyst coverage and trading volume
1 Opportunity for SB Unitholders to Exit SB REIT These factors have collectively contributed towards: (i) the SB Unit price underperforming the broader FTSE ST REIT index since IPO; (ii) SB REIT’s relatively limited analyst following; and (iii) SB Units’ relatively low daily trading volume SB Unit P
Slide 16: Proposal by BX SPV presents the best option for minority unitholders
1 Opportunity for SB Unitholders to Exit SB REIT Faced with these outcomes, the Sponsor believes that the proposal by BX SPV presents the best option for minority SB Unitholders The Sponsor has considered several options to unlock value for SB Unitholders, and had received proposals from various par
Slide 17: Financial Evaluation of the Trust Scheme
Financial Evaluation of the Trust Scheme 17
Slide 18: Financial Evaluation of the Trust Scheme
Financial Evaluation of the Trust Scheme The Scheme Consideration represents a premium of 34.5%, 34.8%, 53.2% and 29.1% to the 1M, 3M, 6M and 12M A volume-weighted average price (“VWAP”) respectively The Scheme Consideration of S$0.550 per SB Unit is equivalent to the 1-year high closing price of SB
Slide 19: Adjusted Net Asset Value per SB Unit
2 Adjusted Net Asset Value per SB Unit to account for re-valuation of SB Properties • The SB Manager has commissioned the Independent Valuers to undertake a re-valuation of SB REIT’s investment properties and an investment property under development in Singapore and Australia (the “SB Properties”) •
Slide 20: Premium to 1M, 3M, 6M and 12M VWAP
2 Financial Evaluation of the Trust Scheme The Scheme Consideration represents a premium of 34.5%, 34.8%, 53.2% and 29.1% to the 1M, 3M, 6M and 12M VWAP respectively(1) Scheme Consideration : S$0.550 per SB Unit 27.9% 34.5% 34.8% 53.2% 29.1% S$0.430 S$0.426 S$0.409 S$0.408 S$0.359 Last Transacted Pr
Slide 21: Scheme Consideration equals the 1-year high closing price
2 Financial Evaluation of the Trust Scheme The Scheme Consideration of S$0.550 per SB Unit is equivalent to the 1-year high closing price of SB Units 1-year SB Unit Price Chart Preceding the Last Full Trading Day Unit Price (S$/unit) 0.600 Scheme Consideration: S$0.550 per SB Unit 0.550 0.500 0.450
Slide 22: P / Adjusted NAV multiple exceeds historical averages
2 Financial Evaluation of the Trust Scheme The P / Adjusted NAV multiple implied by the Scheme Consideration exceeds historical averages(1) 1.00x 0.98x 0.92x 0.94x 0.91x 0.78x Scheme Consideration/ Scheme Consideration/ Historical 1-year Historical 3-year Historical 5-year Average P/NAV since Adjust
Slide 23: Premia to analyst target prices
2 Financial Evaluation of the Trust Scheme The Scheme Consideration represents premia of 18.3% and 12.2% to the overall average analyst target price and the average of analyst target prices issued after the results for 3Q2020 respectively(1)(2) Average target price: S$0.490 per SB Unit based on repo
Slide 24: Timeline and Approvals Required
Timeline and Approvals Required 24
Slide 25: Trust Scheme and Australian Asset Disposal subject to unitholder approval
The Trust Scheme and the Australian Asset Disposal will be subject to approval of the SB Unitholders and various other conditions SB Unitholder Approvals Requirements Amendment of SB Trust Deed (Extraordinary Resolution) ▪ Approval of not less than 75% of the total number of votes cast(1) (“SB Trust
Slide 26: Expected Indicative Timeline
Expected Indicative Timeline The Trust Scheme is expected to be effective by March 2021 1 3 5 7 14 December 2020 Mid-February 2021 Mid-March 2021 (1) Joint Announcement of Early April 2021 Despatch of Scheme Expected date of Trust Scheme Document, notice of second Court hearing Expected delisting of
Slide 27: Investor and Media Contacts
Investor and Media Contacts Investor Contacts Financial Adviser to the SB Manager Financial Adviser to the Offeror DBS Bank Ltd. Citigroup Global Markets Singapore Pte. Ltd. Strategic Advisory Investment Banking Telephone: +65 6878 6347 Telephone: +65 6657 5300 Media Contact SB REIT Investor Relatio
Soilbuild Business Space REIT — Merger or Acquisition (December 2020) on 6ix