Recently-listed hotel landlord OUE Hospitality Trust (SGX:SK7) has declined an offer by OUE Limited to acquire the Meritus Mandarin Haikou and the Meritus Shantou China.
|The OUE Hospitality Trust started with an initial portfolio of 2 properties along Orchard Road, They are namely the Mandarin Gallery and the Mandarin Orchard Singapore.|
Managers of OUE hospitality Trust has explained that they are of the view that acquiring these hotels will not be accretive to the distribution per stapled security at the proposed purchase consideration levels.
The Meritus Mandarin Haikou was offered at a purchase consideration of S$58,700,000 while the Meritus Shantou China was offered at a purchase consideration of S$49,300,000. Both acquisitions were to take place via purchases of shares of companies that own these hotels.
The offers to acquire the hotels were made unsolicited and done in pursuant to a Right of First Refusal agreement entered between the trsutee-manager of OUE Hospitality Trust and OUE. This agreeement has been seen by investors as a probable indication that the hotels are to be acquired by the trust.
Units of OUE Hospitality Trust are currently trading flat from its previous closing price of S$0.88.