Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/esr-reit" target="_blank" data-smartkarma-citation="entities:10934:1" rel="noopener">ESR-REIT</a> has announced a bump in the scheme consideration for <a href="https://www.smartkarma.com/entities/ara-logos-logistics-trust" target="_blank" data-smartkarma-citation="entities:937:1" rel="noopener">ARA LOGOS</a> unitholders. Cash increases from S$0.095 to S$0.097 per unit, plus 1.7729 <a href="https://www.smartkarma.com/entities/esr-reit" target="_blank" data-smartkarma-citation="entities:10934:1" rel="noopener">ESR-REIT (EREIT SP)</a> units (from 1.6765 earlier).</li>
<li>This follows Glass Lewis and ISS recommending that <a href="https://www.smartkarma.com/entities/ara-logos-logistics-trust" target="_blank" data-smartkarma-citation="entities:937:1" rel="noopener">ARA LOGOS</a> unitholders vote against the Scheme. Plus there is a conflict of interest following <a href="https://www.smartkarma.com/entities/esr-cayman-ltd" target="_blank" data-smartkarma-citation="entities:27983:1" rel="noopener">ESR Cayman</a>'s acquisition of <a href="https://www.smartkarma.com/entities/ara-asset-management" target="_blank" data-smartkarma-citation="entities:13301:1" rel="noopener">ARA Asset Management</a>.</li>
<li>While the situation is far from a great outcome for <a href="https://www.smartkarma.com/entities/ara-logos-logistics-trust" target="_blank" data-smartkarma-citation="entities:937:1" rel="noopener">ARA LOGOS</a> unitholders, it is better than the earlier proposal and could pass muster this time around.</li>
</ul>



ESR-REIT has announced a bump in the scheme consideration for ARA LOGOS unitholders. Cash increases from S$0.095 to S$0.097 per unit, plus 1.7729 ESR-REIT (EREIT SP) units (from 1.6765 earlier).
This follows Glass Lewis and ISS recommending that ARA LOGOS unitholders vote against the Scheme. Plus there is a conflict of interest following ESR Cayman's acquisition of ARA Asset Management.
While the situation is far from a great outcome for ARA LOGOS unitholders, it is better than the earlier proposal and could pass muster this time around.


ESR-REIT's Improved Offer for ARA LOGOS: Two Cents More

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>PropertyGuru (PG) tried to raise around US$300m when it undertook a merger with Bridgetown 2 SPAC in Mar 2022.</li>
<li>The transaction valued PropertyGuru at an EV of US$1.35bn and equity value of US$1.78bn. It is now trading at less than half that valuation and with very limited liquidity.</li>
<li>In this note, we will talk about the lock-up dynamics and updates since our last note.</li>
</ul>


PropertyGuru (PG) tried to raise around US$300m when it undertook a merger with Bridgetown 2 SPAC in Mar 2022.
The transaction valued PropertyGuru at an EV of US$1.35bn and equity value of US$1.78bn. It is now trading at less than half that valuation and with very limited liquidity.
In this note, we will talk about the lock-up dynamics and updates since our last note.


PropertyGuru SPAC Lock-Up - Two PE’s with a US$450m Stake Are Stuck with a Liquidity Conundrum

Equity Capital Markets

Digital Core REIT / Equity Capital Markets

<ul>
<li>Digital Core REIT (DCREIT), a data center REIT, aims to raise up to US$600m in its Singapore IPO.</li>
<li>The company is sponsored by Digital Realty, one of the largest REITs in the US, and over 60% of the deal is already spoken for by cornerstone investors.</li>
<li>In this note, we will talk about the deal background</li>
</ul>


Digital Core REIT (DCREIT), a data center REIT, aims to raise up to US$600m in its Singapore IPO.
The company is sponsored by Digital Realty, one of the largest REITs in the US, and over 60% of the deal is already spoken for by cornerstone investors.
In this note, we will talk about the deal background


Digital Core REIT IPO - Hot Sector, Strong Backing but Has More than a Few Peculiar Points

Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/straits-trading-co-ltd" target="_blank" data-smartkarma-citation="entities:15745:1" rel="noopener">Straits Trading (STRTR SP)</a> was written up as a privatization candidate almost two months ago. <a href="https://www.smartkarma.com/insights/straits-trading-ripe-for-privatisation" target="_blank" data-smartkarma-citation="insights:44300" rel="noopener">Straits Trading - Ripe For Privatisation</a> by <a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a>.</p><p><strong>We agree with David that Straits Trading is interesting but doubt a privatization is on the table. </strong>Straits Trading has been publicly traded since 1979 and the SGX listing is actually useful for the family behind TeCity (controlling shareholder is itself a family office). </p><div class="content-highlight"><p>The crown jewel of Straits Trading is its 22% stake in <a href="https://www.smartkarma.com/entities/ara-asset-management" target="_blank" data-smartkarma-citation="entities:13301:1" rel="noopener">ARA Asset Management (ARA SP)</a>. ARA was delisted from the SGX by founder John Lim, Warburg Pincus, and Straits Trading in February 2017. <strong>We believe ARA gets relisted on the SGX between 2Q21 and 2Q22.</strong></p></div><p>Assuming 120-150 billion SGD Assets Under Management at the time of IPO ARA could be valued between 6-7.5 billion SGD. This market cap would lead to entry into the STI Index relatively quickly.</p><p>Assuming the above Straits Trading's 22% stake in ARA is potentially worth 1.32-1.65 billion SGD. Compare this to the current market cap of Straits Trading at 754 million SGD. Admittedly, there are some "if" and "but" that applies as we don't know the leverage of ARA at the time of IPO, the cost of its debt, and if markets will again apply an EV/AUM ratio of 5% (similar to its delisting in 2017). Still, risk/reward seems heavily skewed to the upside.</p><p><strong>Conclusion:</strong> if investment bank "ABC" approached you to invest in SGX's hottest 2021 IPO at a +/- 50% discount to its likely list price (with additional assets thrown in for free!) would you take the call? </p><p> + Free upside comes from its tin, real estate, and hospitality assets. While you wait the stock pays you a 3% dividend yield.</p>

Straits Trading (STRTR SP) was written up as a privatization candidate almost two months ago. Straits Trading - Ripe For Privatisation by David Blennerhassett.We agree with David that Straits Trading is interesting but doubt a privatization is on the table. Straits Trading has been publicly traded since 1979 and the SGX listing is actually useful for the family behind TeCity (controlling shareholder is itself a family office). The crown jewel of Straits Trading is its 22% stake in ARA Asset Management (ARA SP). ARA was delisted from the SGX by founder John Lim, Warburg Pincus, and Straits Trading in February 2017. We believe ARA gets relisted on the SGX between 2Q21 and 2Q22.Assuming 120-150 billion SGD Assets Under Management at the time of IPO ARA could be valued between 6-7.5 billion SGD. This market cap would lead to entry into the STI Index relatively quickly.Assuming the above Straits Trading's 22% stake in ARA is potentially worth 1.32-1.65 billion SGD. Compare this to the current market cap of Straits Trading at 754 million SGD. Admittedly, there are some "if" and "but" that applies as we don't know the leverage of ARA at the time of IPO, the cost of its debt, and if markets will again apply an EV/AUM ratio of 5% (similar to its delisting in 2017). Still, risk/reward seems heavily skewed to the upside.Conclusion: if investment bank "ABC" approached you to invest in SGX's hottest 2021 IPO at a +/- 50% discount to its likely list price (with additional assets thrown in for free!) would you take the call?  + Free upside comes from its tin, real estate, and hospitality assets. While you wait the stock pays you a 3% dividend yield.

Straits Trading: Discounted Way into 2021 SGX's Hottest IPO

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<p>In this Smartkarma Webinar, <a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> will discuss the hostile situation between <a href="https://www.smartkarma.com/entities/cromwell-property-group" target="_blank" data-smartkarma-citation="entities:2780:1" rel="noopener">Cromwell Property (CMW AU)</a> and ARA Asset Management, further described in <a href="https://www.smartkarma.com/insights/cromwell-ara-a-festering-relationship" target="_blank" data-smartkarma-citation="insights:40614" rel="noopener">Cromwell/ARA: A Festering Relationship</a>.</p><div><h3>The webinar will be hosted on Wednesday, 15/July/2020, 5.00pm SGT/HKT.</h3></div><hr><div><div><div class="content-highlight"><h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=83779111093" target="_blank" rel="noopener">Register for the Webinar here</a></h2></div></div></div><hr><div><p>David is a highly experienced analyst with more than 20 years covering Asia Pacific equities, the past 13 years immersed in event strategies encompassing M&amp;A risk arbitrage, directional long/short, stub trades and restructuring.</p></div>

In this Smartkarma Webinar, David Blennerhassett will discuss the hostile situation between Cromwell Property (CMW AU) and ARA Asset Management, further described in Cromwell/ARA: A Festering Relationship.The webinar will be hosted on Wednesday, 15/July/2020, 5.00pm SGT/HKT.Register for the Webinar hereDavid is a highly experienced analyst with more than 20 years covering Asia Pacific equities, the past 13 years immersed in event strategies encompassing M&amp;A risk arbitrage, directional long/short, stub trades and restructuring.

Smartkarma Webinar | Cromwell/​ARA: A Festering Relationship

Singapore

ARA Asset Management Limited is a real estate fund management company that focuses on the management of public-listed real estate investment trusts, REITs. The Company manages REITs, private real estate funds, specialist equity funds and offers corporate finance advisory services.

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ARA Asset Management (ARA SP)

ESR-REIT's Improved Offer for ARA LOGOS: Two Cents More

ESR REIT has improved its offer for ARA LOGOS following Glass Lewis & ISS recommending that ARA LOGOS unitholders vote against the scheme. This is...

Brian Freitas

PropertyGuru SPAC Lock-Up - Two PE’s with a US$450m Stake Are Stuck with a Liquidity Conundrum

PropertyGuru mergered with Bridgetown 2 SPAC in Mar 2022. Its 180-days lockup will end soon freeing its two large PE shareholders.

Sumeet Singh

Digital Core REIT IPO - Hot Sector, Strong Backing but Has More than a Few Peculiar Points

Digital Core REIT (DCREIT), a data center REIT, aims to raise up to US$600m in its Singapore IPO. In this note, we will talk about the positive and...

Sumeet Singh

Straits Trading: Discounted Way into 2021 SGX's Hottest IPO

Straits Trading offers a discounted way to invest in what is likely going to be the hottest IPO on the SGX in 2021. If our thesis is right Straits...

Nicolas Van Broekhoven

Smartkarma Webinar | Cromwell/ARA: A Festering Relationship

In this Smartkarma Webinar, David Blennerhassett will discuss the hostile situation between Cromwell Property (CMW AU) and ARA Asset Management,...

Smartkarma Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

ESR-REIT's Improved Offer for ARA LOGOS: Two Cents More

ESR REIT has improved its offer for ARA LOGOS following Glass Lewis & ISS recommending that ARA LOGOS unitholders vote against the scheme. This is...

Brian Freitas

PropertyGuru SPAC Lock-Up - Two PE’s with a US$450m Stake Are Stuck with a Liquidity Conundrum

PropertyGuru mergered with Bridgetown 2 SPAC in Mar 2022. Its 180-days lockup will end soon freeing its two large PE shareholders.

Sumeet Singh

Digital Core REIT IPO - Hot Sector, Strong Backing but Has More than a Few Peculiar Points

Digital Core REIT (DCREIT), a data center REIT, aims to raise up to US$600m in its Singapore IPO. In this note, we will talk about the positive and...

Sumeet Singh

Straits Trading: Discounted Way into 2021 SGX's Hottest IPO

Straits Trading offers a discounted way to invest in what is likely going to be the hottest IPO on the SGX in 2021. If our thesis is right Straits...

Nicolas Van Broekhoven

Smartkarma Webinar | Cromwell/​ARA: A Festering Relationship

In this Smartkarma Webinar, David Blennerhassett will discuss the hostile situation between Cromwell Property (CMW AU) and ARA Asset Management,...

Smartkarma Research

Smartkarma Webinar | Cromwell/ARA: A Festering Relationship