* Property developer already owns 65 pct of CapitaMalls Asia
* Offers S$2.22 per share, 23 pct premium to previous close
* Deal designed to streamline CapitaLand structure
(Adds market reaction comment, context from statement)
By Anshuman Daga and Saeed Azhar
SINGAPORE, April 14 CapitaLand Ltd,
Southeast Asia's biggest property developer, said it has offered
S$3.06 billion ($2.45 billion) to buy out minority shareholders
in its 65-percent owned CapitaMalls Asia Ltd business.
In a deal that would simplify its corporate structure and
taking advantage of a discount valuation at the unit, CapitaLand
said on Monday it's offering S$2.22 per share in CapitaMalls, a
shopping malls operator. That represents a 23 percent premium to
last Friday's CapitaMalls closing share price of S$1.80.
Trading in both CapitaMalls and CapitaLand, 39-percent-owned
by Singapore sovereign investor Temasek Holdings, was
halted from the start of trading on Monday pending an
"It's a function of a change in strategy" at CapitaLand,
said Donald Chua, head of Asia ex-Japan property research at
CIMB. "The new CEO has been trying to restructure the company
and he wants to increase ROE (return on equity) and IRR
(internal rate of return)," he said.
CapitaMalls stock has been trading at a discount to revised
net asset value in the last few years, Chua said. Shares in
CapitaMalls have traded below its IPO price of S$2.12 for most
of the period since it was listed in late 2009.
After being named chief executive in January 2013, Lim Ming
Yan has taken steps to focus on CapitaLand's core businesses in
China and Singapore, while the company has shed stakes in
non-core markets. In March, CapitaLand sold its remaining 39.1
percent stake in Australia's Australand Property Group
for around $849 million.
There has been a spate of acquisitions in Singapore's real
estate sector over the past two years, where business tycoons
are taking advantage of depressed prices to take listed property
Firms linked to Singapore's fourth-richest man, Wee Cho Yaw,
are involved in two such takeovers, following a move by the
chairman of luxury developer SC Global Developments Ltd, Simon
Cheong, to take his firm private in late 2012.
The CapitaMalls offer comes as Singapore's property market
enters a slowdown following a number of measures by the
government to cool the market by imposing lending curbs and
taxing foreign buyers. The market is still up about 59 percent
since 2009, fuelled by rock-bottom lending rates and foreign
CapitaLand said the acquisition would simplify the group's
organisational structure and boost shareholder returns.
"CapitaLand Group will benefit from a clearer structure -
with a single listed developer integrated across all asset
classes," CapitaLand said in a statement to the Singapore
exchange on Monday.
CapitaMalls, which manages 105 shopping malls, earned 43
percent of its revenue from China last year, 32 percent from
Singapore, and most of the rest from Japan and Malaysia.
Morgan Stanley and Credit Suisse are
advising CapitaLand on the transaction.
($1 = 1.2481 Singapore Dollars)
(Reporting by Anshuman Daga and Saeed Azhar; Additional
reporting by Eveline Danubrata; Editing by Kenneth Maxwell)