Frasers L&C Tr
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Frasers Logistic & Industrial Trust IPO
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Bro,... how do you think will Brexit affect FCOT' s portfolio ? Brexit is quite certain to take place now with the Boris Win. I read somewhere though that he may want to ' pull the negotiations' longer to try to secure a better deal for The UK.
Hoping he will not delay again as per earlier events !
Goldfinger ( Date: 14-Dec-2019 10:37) Posted:
| FCOT now looks like a bargain buy with Brexit. FCOT should reject offer. |
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FCOT now looks like a bargain buy with Brexit. FCOT should reject offer.
most reits down. Shift to risk.
So many disgruntled sellers selling down
Same answer :)
This is back to basics calculations
#FLT shares 2,258,787 at NAV $0.95 = Nett Total Value $2,145,847
#FCOT shates 912,715 at NAV $1.61 = Nett Total Value $1,469,471
But FCOT pays out $0.151 for conversion of its 912,715 shares = $137,820
So after the conversion Nett Total Value of FCOT is ( $1,469,471 less $137,820) = $1,331,651
Nett Total value of combined FLT and FCOT ( $2,145,847 plus $1,331,651) = $3,477,498
#new FLT shares converted from FCOT ( 912,715 times 1.233 ) = 1,125,377
#new TOTAL FLT shares ( 1,125,377 plus 2,258,787 ) = 3,384,164 new FLT shares
New NAV FLT is $3,477,498 divided by 3,384,164 = $1.0275796
TQ bro chengwh1, after substituted $e and $f, I get nav of merged FLT = 1.027579699
subaru ( Date: 11-Dec-2019 14:16) Posted:
let me try this math problem :p
Current number of FLT shares (' 000): 2,258,787 -- A
Current number of FCOT shares (' 000): 912,715 -- B
Number of new FLT shares issued as payment to FCOT (' 000): 1.233*B= 912,715*1.233 = 1,125,378 -- C
FLT also pay cash to FCOT = $0.151 * B = $d
current NAV of FCOT = $e
current NAV of FLT = $f
After acquisition, there are (A+C) FLT shares.
After acquisition, NAV of FLT = [$f*A + $e*B - $d]/(A+C) =[$f*A + $e*B - $0.151*B]/(A+C)
Bros here got data of $e and $f to substitute in the above expression?
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Bro Subaru,... nav numbers below in my earlier calculations per-merger ann' ts,...
chengwh1 ( Date: 29-Nov-2019 16:34) Posted:
Bros, let me try to put forward here,... in the simplest way possible, a scenario of merging.
As of end-FY19, ending on September 30th., 2019, based on audited results, the following are the nav per unit :-
1) FLT = $0.95 per unit.
2) FCT = $1.61 per unit.
Therefore, the GER (Gross Exchange Ratio) = 0.95/1.61 = 0.5900.
The final closing price of FCT prior to ' Halt' yesterday morning at 8.02am was : $1.67.
As heavy consideration to holders of FCT, I will assume a TEMP (Theoretical Ex-Merging Price) of $1.70 as issue price for the conbined REIT on Listing Day in the future.
To work out the TEMNP (Theoretical Ex-Merging NAV Price) for FLT, we compute the following : 0.5900 x $1.70 = $1.003 ONLY, this is sad,... for I currently hold FLT at 99c.
With the above scheme-of-arrangement, and calling the combined or post-merging units as ' Frasers Logistics & Commercial Trust (FLCT)' :-
1) For FCT Holders, nothing needs to be done except for just converting over their units from FCT to FLCT at a ratio 1:1.
2) For FLT Holders, every unit of FLT will need to be converted to ONLY 0.59 unit of FLCT at a ratio of 1:0.59.
In other words, every one of my FLT unit will get 0.59 unit of FLCT, based on my assumed framework in the above.
The $1.003 TEMNP may be satisfied by just FLCT units, which will follow the conversion equation from 2) above, or this $1.003 may be satisfied by a combination of units of FLCT and cash reimbursement.
I personally hoped the managers of FCT and FLT have an alternative framework, because as a holder of FLT (AND NO FCT Units at all), I am losing heavily here in terms of dpu amount to be collected later and in terms of capital gain compared to the last close price of $1.24 for FLT ! |
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let me try this math problem :p
Current number of FLT shares (' 000): 2,258,787 -- A
Current number of FCOT shares (' 000): 912,715 -- B
Number of new FLT shares issued as payment to FCOT (' 000): 1.233*B= 912,715*1.233 = 1,125,378 -- C
FLT also pay cash to FCOT = $0.151 * B = $d
current NAV of FCOT = $e
current NAV of FLT = $f
After acquisition, there are (A+C) FLT shares.
After acquisition, NAV of FLT = [$f*A + $e*B - $d]/(A+C) =[$f*A + $e*B - $0.151*B]/(A+C)
Bros here got data of $e and $f to substitute in the above expression?
I may be wrong but I think that there is no need to go through these calculations.
Frasers Comm and Frasers L& I have been valued at $1.68 and $1.24 respectively for the merger.
Frasers Comm holders are paid with cash and share from Frasers L& I, so post merger Frasers L& I is still valued at $1.24, everything else remain the same. Make sense?
can you please explain about D. I do not undestand. What is the 11.2m? why divide by 1.24?
machop ( Date: 06-Dec-2019 16:21) Posted:
Think the number of shares calculation can be further refined, unlikely to be so straightforward to just add both together like that on a per share basis. 1+1.233 implies that there is a 123.3% increase in the share base of FLT.
I think it should be:
Current number of FLT shares (' 000): 2,258,787 -- A
Current number of FCOT shares (' 000): 912,715 -- B
Number of new FLT shares issued as payment to FCOT (' 000): 912,715*1.233 = 1,125,378 -- C
Number of new FLT shares issued as payment of acquisition fees: S$11.2m / 1.24 = 9.03m -- D
Ending number of FLT shares = A + C + D = 3,393,197 (about a 50% increase in number of shares)
laksaman57 ( Date: 03-Dec-2019 22:55) Posted:
Pre Merger
FLT nav @0.95 @$1.24 ....P/Nav = 1.305
FCOT nav $1.61 ...@$1.67, P/Nav = 1.037
Post Merger
FLT(merged) nav ($0.95 + $1.61) = $2.56
FLT(merged) share = 1+1.233 = 2.233 shares
NAV per share = $2.56/2.233 = $1.146
@$1.24, P/Nav = 1.24/1.146 = 1.081
It' s a MUST BUY ! |
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FLT : Good quality : allows currency election, ie able to pay out dpus in AUD and in SGD. Bad quality : pays out ONLY two times a year.
FCOT : Good quality : pays out four times a year. Bad quality : no currency election option allowed.
I hoped the NEW FLT will carry all the good qualities and NOT BAD QUALITIES.
We' ll see how the common sponsor mgr handles this !!!!!!!!!!!!!!!
Think the number of shares calculation can be further refined, unlikely to be so straightforward to just add both together like that on a per share basis. 1+1.233 implies that there is a 123.3% increase in the share base of FLT.
I think it should be:
Current number of FLT shares (' 000): 2,258,787 -- A
Current number of FCOT shares (' 000): 912,715 -- B
Number of new FLT shares issued as payment to FCOT (' 000): 912,715*1.233 = 1,125,378 -- C
Number of new FLT shares issued as payment of acquisition fees: S$11.2m / 1.24 = 9.03m -- D
Ending number of FLT shares = A + C + D = 3,393,197 (about a 50% increase in number of shares)
laksaman57 ( Date: 03-Dec-2019 22:55) Posted:
Pre Merger
FLT nav @0.95 @$1.24 ....P/Nav = 1.305
FCOT nav $1.61 ...@$1.67, P/Nav = 1.037
Post Merger
FLT(merged) nav ($0.95 + $1.61) = $2.56
FLT(merged) share = 1+1.233 = 2.233 shares
NAV per share = $2.56/2.233 = $1.146
@$1.24, P/Nav = 1.24/1.146 = 1.081
It' s a MUST BUY ! |
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Ever since the announcement of the upcoming merger between Frasers Commercial Trust (" FCOT" ) and Frasers Logistics & Industrial Trust (" FLT" ), it gave rise to the strange situation of an arbitrage forming due to wide pricing fluctuation between the 2 REITs. Arbitrage is the process of exploiting differences in the price of an asset by simultaneously buying and selling it and in the process, the arbitrageur pockets an almost risk free return. For example, On 3rd December 2019, the price of FCOT suddenly shot up to S$1.72 when the offered price for the merger exercise valued it at S$1.68.
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| Extract of Merger Scheme for FCOT and FLIT |
1. Market apparently is trying to price in who received the shorter end of the stick
Now, this is a matter of differences in perspectives that lead to the see-saw pricing of both FCOT and FLT ever since the merger announcement. Some view that FCOT got the shorter end of the stick as the deal did not take into account the improving signing rents at Alexandra Technopark post AEI. FCOT also have a much lower gearing relative to FLT. Valuing it at S$1.68 from the merger thus undervalued the fair pricing of as high as expected S$1.76 per unit.
As for FLT supporters, they view the earnings of the REIT as more resilient and have annual rental escalations in its leases as well as a steady proven organic growth profile. Pricing the exchange of shares at S$1.24 per unit to FCOT unit holders thus severely underpin the fair value of at least S$1.30 per unit.
2. The pricing offered in the exercise are actually quite fair
Frasers Property sweeten the deal by also throwing in the proposed acquisition of the remaining 50% of Farnborough Business Park based in UK conditional to the completion of the merger. This acquisition will be yield accretive and I reckon it is thrown in to incentivise the unitholders of both FCOT and FLT for them to support the merger deal. As such, personally, I would think that the pricing of S$1.68 per unit for FCOT and S$1.24 per unit for FLT are supported and fair.
3. Opportunity to make small profit out of the merger exercise
One good example as mentioned above is on 3rd December. The pricing of FCOT shot up to S$1.72 from S$1.68. Those who managed to get a unit at S$1.68 per unit can simply sell off at S$1.71 to S$1.72 per unit and then buy FLT which is being priced at S$1.24 per unit. Of course, one have to be careful on which price to enter into for FLT which is also similarly going up and down like a yoyo.
Another example would be on 4th December, prices for FCOT at one point dropped to S$1.65 to $1.66 per unit range. One could purchase and then hold on till completion of the exercise. Alternatively, one can chose to just do a simple sell off of FCOT when it rebounded to S$1.68 per unit.
On 3rd December 2019, I have sold off all my FCOT positions at S$1.71 per unit and used it to buy up FLT at S$1.23 per unit during the pricing mismatch at different times of the day. In addition, as I was on annual leave for the past 2 days and have nothing much to do, I decided to monitor the daily fluctuation in price and do a quick buy and sell and lock in some small profits of a few hundred dollars. The downside is that this is not entirely risk free and you maybe forced to hold on to the units but I believe in the long term prospect of FLT and market pricing shall revert to its fair value eventually.
Parting Thoughts
The entire merger exercise will probably take another 3 to 4 months to complete. I do hope that the deal is completed as soon as possible as the new business entity will enjoy better diversification in terms of its property portfolio and also better leverage during negotiation with bankers on financing.
NAV is net asset value " per share" ? I think need to know the no, of shares in FLT & FCOT.
Pre Merger
FLT nav @0.95 @$1.24 ....P/Nav = 1.305
FCOT nav $1.61 ...@$1.67, P/Nav = 1.037
Post Merger
FLT(merged) nav ($0.95 + $1.61) = $2.56
FLT(merged) share = 1+1.233 = 2.233 shares
NAV per share = $2.56/2.233 = $1.146
@$1.24, P/Nav = 1.24/1.146 = 1.081
It' s a MUST BUY !
FLT 4Q19 dpu - 1.73cts .....@$1.24, yield 5.58%
FCOT 4Q19 dpu - 2.40cts .....@$1.67, yield 5.75%
FLT(merged) dpu = 1.73+2.40 = 4.13cts
FLT(merged) share = 1+1.233 = 2.233 shares
DPU per share > 4.13/2.233 = 1.85cts
FLT(merged) @$1.24, yield = (1.85x4)/124 = 5.95%
It' s a sure BUY !chengwh1 ( Date: 03-Dec-2019 21:49) Posted:
 hehehe,... the unit price did rise up !!! 
But,.. we cannot buy then,... hehehe,...
No prob, bro,... still a long time to go.
laksaman57 ( Date: 03-Dec-2019 20:34) Posted:
Disgruntled unitholders need a shock to wake them up lah. See, closed back to $1.24.
Tomolo will rise liao  |
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Keeper for me too,... but need to decide at what price to enter again,....
Goldfinger ( Date: 03-Dec-2019 21:16) Posted:
| Sorry folks - this is a keeper for me. Freehold mah. Happy with the conversion ratios for FCOT and will add to my FLT with some cash back. Lovely. |
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hehehe,... the unit price did rise up !!!
But,.. we cannot buy then,... hehehe,...
No prob, bro,... still a long time to go.
laksaman57 ( Date: 03-Dec-2019 20:34) Posted:
Disgruntled unitholders need a shock to wake them up lah. See, closed back to $1.24.
Tomolo will rise liao
chengwh1 ( Date: 03-Dec-2019 15:19) Posted:
Bad laksa,... look what you have done,.. after your strong posting, nobody said anything anymore !! 
We started this thing with calculations and all,...
If nobody feeds back, nobody comments, we stand to lose together,. |
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