Swiss-run activist fund Quarz Capital successfully blocked a proposed merger that would have created Singapore's fifth-largest real estate investment trust.
The proposed tie-up between ESR-REIT and Sabana Shari'ah Compliant Industrial REIT was rejected by Sabana's shareholders. The deal would have given the enlarged entity assets of about S$4.1 billion ($3 billion).
While ESR-REIT investors overwhelmingly voted for the merger, Sabana failed to get the 75% required support as just two-thirds of the votes were in favour, according to a statement from Sabana yesterday.
Quarz's success in blocking the tie-up is a rare win for activists funds in Singapore, which is Asia's largest REIT market, collectively worth more than $70 billion. Dominated by retail shareholders, investors are lured by REITs as they're mandated to pay 90% of rental income as dividends making them more attractive.
Sabana last traded Thursday at 36 cents in Singapore before being halted. The company has a market value of S$374 million ($281 million), compared with S$1.46 billion for ESR.