Study scheme document before deciding how to vote on Sabana-ESR Reit merger: Sabana Reit's trustee

THE trustee of Sabana Shari'ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) on Wednesday urged unitholders to read a forthcoming scheme document before they decide how they will vote on the planned merger with ESR-Reit.

HSBC Institutional Trust Services (Singapore) told investors in a letter that independent financial adviser Deloitte & Touche's opinion on the terms of the deal will be included in a scheme document to be sent out to Sabana Reit unitholders "in due course".

Saying that it "notes the concerns of the Sabana Reit unitholders", the trustee encouraged unitholders "to carefully consider the information that will be provided in the scheme document", including Deloitte & Touche's assessment and advice.

"Following on from the receipt of the formal offer, the trustee notes that the proposed merger had undergone due process," the trustee added.

On concerns over potential conflicts of interest, the trustee noted that the Monetary Authority of Singapore does not prohibit a shareholder group from owning substantial stakes in two Reit managers that manage Reits invested in the same property class. ESR Cayman owns substantial stakes in both ESR-Reit's and Sabana Reit's managers.

The trustee's statement referred to a Sept 3 letter from activist unitholders Quarz Capital Management and Black Crane Capital, which asked the trustee whether the manager "failed to follow the terms of the trust deed to the prejudice of the participants".

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Quarz has opposed the planned deal since it was launched in July, on the grounds that ESR-Reit's implied offer price of 37.7 Singapore cents for each Sabana unit is too low.

Sabana units closed flat at S$0.37 on Wednesday, before the latest announcement. ESR-Reit ended unchanged at S$0.39.