By Amanda Lee
Singapore's Temasek-backed sponsor of Paragon REIT offered to take the retail investment trust private, valuing it at more than $2 billion, in a bid to renovate its flagship shopping mall in the heart of the Asian financial hub.
Cuscaden Peak Investments, the sponsor, said Tuesday that Paragon's premier status in Singapore's central shopping district is being challenged by neighboring malls that are undergoing major upgrades and coming redevelopments in the area.
The retail REIT's sponsor said a major renovation, which could take several years, would be necessary to maintain the long-term competitiveness of the Paragon shopping mall.
"In the face of the uncertainties in the execution and extent of such an initiative, it would be more suitably carried out with Paragon REIT as a private entity," said Gerald Yong, chief executive officer of Cuscaden Peak Investments.
Paragon REIT relies heavily on Paragon, an upscale shopping mall that is more than 30 years old and accounts for 72% of the investment trust's appraised value.
Cuscaden Peak said Tuesday that its subsidiary had made a cash offer of 98 Singapore cents for each Paragon REIT unit. That represents a premium of 10.9% to the one-month volume-weighted average price, the sponsor said. The REIT will also distribute 2.33 Singapore cents per unit in cash for the second half of 2024, it said.
The offer values the investment trust at 2.78 billion Singapore dollars, equivalent to $2.05 billion.
Cuscaden Peak is jointly owned by CLA Real Estate Holdings and Mapletree Investments, a unit of Singapore state-owned investment firm Temasek Holdings. CLA Real Estate is also an independently managed subsidiary of Temasek.
Cuscaden Peak and its subsidiaries, which hold 61.5% in Paragon REIT, will abstain from voting on the privatization, it said. Unitholders' meetings are expected to be held by April.
Citigroup Global Markets Singapore and Morgan Stanley Asia (Singapore) are advisers on the deal.
Write to Amanda Lee at amanda.lee@wsj.com
(END) Dow Jones Newswires
February 10, 2025 23:33 ET (04:33 GMT)
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