The funds advised by Blackstone Real Estate, through Cyrus BidCo, are proposing to acquire all of the issued units of the Singapore-listed Croesus Retail Trust (CRT), which will result in CRT being privatized and delisted from the Singapore Exchange (SGX).

The acquisition will be effected by way of a trust scheme in compliance with the Singapore code on takeovers and mergers. The offer is S$1.17 (US$0.85) in cash per unit, making the implied equity value of CRT at about S$900.6 million.

Luz Omori, Tokyo. Photo: croesusretailtrust.com

The scheme consideration represents a premium of about 38% to the 12-month volume weighted average price per unit. It also exceeds the highest closing price of the units, being S$1.09 per unit in May 2013 since CRT was listed on the SGX main board.

The valuation implied by the scheme consideration is also above the latest available market values of the CRT properties – about 23% over the net asset value and 31% above the net tangible asset per unit as at March 31 2017.

The unit holders may also receive distributable income of CRT up to an aggregate of about S$31.3 million, assuming the effective date falls on or before October 31 2017. This represents approximately 4.06 Singapore cents per unit as the trustee-manager (Croesus Retail Asset Management) is permitted under the implementation agreement to declare such distribution to unit holders.

CRT chairman and independent director David Lim says that after an extensive deliberation of the proposed scheme, they believe the offer provides an opportunity for their unit holders to realize their investment for cash at a significant premium.

In launching the offer, Christopher Heady, senior managing director and head of real estate Asia of the Blackstone Group, notes that CRT has an established portfolio of quality Japanese retail assets, and the transaction represents a good opportunity for Blackstone’s real estate business to further expand its platform in Japan.

Citi is acting as the financial adviser to Croesus Retail Asset Management, while DBS is the financial adviser to the Blackstone Group.

CRT is the first SGX-listed Asia-Pacific retail business trust with a portfolio located in Japan. It is principally focused on investing in a diversified portfolio of predominantly retail real estate assets located in Asia-Pacific, with an initial focus on Japan. It currently has 11 retail properties in Japan, five of which are located in the Greater Tokyo area.