The CapitaLand-controlled Ascott Residence Trust (Ascott REIT) has entered a transaction to take over Ascendas Hospitality Trust for S$1.24bn (€810m) in a cash and units deal.
Ascott REIT is proposing to buy Ascendas Hospitality Trust, which owns hotels in Australia, Singapore, Korea and Japan, at A$1.0868 per unit.
It will pay 5% in cash (S$68m) and 95% in Ascott REIT units, equating to 902.8m units priced at S$1.30 each in the total deal.
If agreed, the combined group will hold a S$7.6bn portfolio of some 16,000 rooms, trading under 15 brands across 15 countries.
Post-transaction, the enlarged group would hold 82% of its properties in developed countries – up from 75% today. Ascott REIT would also gain exposure to Brisbane in Australia and Seoul in South Korea.
At the conclusion of the deal, CapitaLand said it expected to have a 40.2% interest in the combined entity.
Addressing analysts and media, Beh Siew Kim, CEO of Ascott REIT said size and scale mattered in the hospitality sector.
She said that, as the largest hospitality REIT in Asia-Pacific, Ascott REIT would become the proxy hospitality REIT for investors looking to invest in this sector.
The deal, which requires 75% of unitholder approval, is expected to be settled by the end of this year.