Saturday 9 September 2017

My Thoughts On Proposed Acquisition of Croesus Retail Trust

Background

On 28 June 2017, Croesus Retail Trust announced a proposed acquisition by Cyrus Bidco Pte. Ltd. of all the issued units. If you are a shareholder of Croesus Retail Trust, you would have received these documents in your mailbox by now.

Wow. Where got time to read?

For those who haven't heard about the news by now, the privatisation of Croesus Retail Trust would be offered at $1.17 per Unit. However, the offer would only go through if 2 conditions are:


  • Approval of >50% in number of Unitholders present and voting in person or by proxy at the Scheme Meeting
  • Approval of >=75% in value of the Units held by Unitholders present and voting in person or by proxy at the Scheme Meeting
The said Meeting would be on 13th Sep 10 am. Unfortunately, I am unable to attend and I do not have a proxy.

I am currently holding 13700 shares at an average price of $0.868.


Screenshots from StocksCafe

My Calculations

Croesus Retail Trust's closing price was $1.055 on 27th June before the buyout announcement. It would seem like shareholders are only getting $1.17-1.055=$0.115 for this deal.

Screenshot from Chartnexus

Now, let's take a look at CRT's recent year dividend record. If we add 2016 and 2017 DPU together, total is $0.0766 + 0.0706 = $0.1472. Alamak! We are offered less than last 2 years of dividends for this buyout offer! Why like that???


Looks like I would reject this offer right? But....

To Be Continued...

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