The manager of Sabana REIT has issued a series of clarifications regarding its proposed merger with ESR-REIT, including why an NAV-NAV route was not considered in the scheme.

The clarifications have been issued against the backdrop of stiff resistance from certain institutional unitholders, who have vowed to reject the proposed merger.

Related: Unholy matrimony: tracing the seeds of dissent in the Sabana REIT, ESR-REIT merger

Among reasons for the dissent include the steep discount offered for Sabana REIT units in terms of NAV.

“The discount to NAV in respect of the merger is reflective of Sabana REIT’s unit trading price at the time of the joint announcement…”, said Sabana REIT.

“It is important to note that a NAV-NAV merger would have been both DPU and NAV dilutive for ESR- REIT unitholders, and the merger by way of a scheme is ultimately required to be approved by both Sabana unitholders and ESR-REIT unitholders”, it added.

The full clarification statement from Sabana REIT can be accessed here.

ESR-REIT and Sabana REIT were last done on the Singapore Exchange at SGD0.39 and SGD0.37, which imply discounts of 5% and 27% to their NAVs respectively according to data compiled on the Singapore REITs table.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.