Paragon REIT’s privatisation offer at S$0.98 per unit. What should unitholders do?
Proposed privatisation by Cuscaden Peak and manager of Paragon REIT
On 11 February 2025, Cuscaden Peak and the manager of Paragon REIT jointly announced the proposed privatisation and delisting of Paragon REIT at a scheme consideration of S$0.98 in cash per unit. This implies a price/adjusted NAV of 1.07x, an 8.4% premium to precedent privatisations, and 10.9% above the 1-month Volume Weighted Average Price (VWAP) and 4.3% above the 52 week high of Paragon REIT. Source: Paragon REIT In addition to the scheme consideration, unitholders will receive 2H24 Distributions Per Unit (DPU) of 2.33 cents per unit in cash.
Rationale for the privatisation
The rationale put forth for the privatisation of Paragon REIT includes: Challenging trading conditions for Paragon REIT given low liquidity;Mounting competition affecting its key asset Paragon;A major AEI required which poses significant risks; and that theScheme offers minorities an exit with an attractive premium while avoiding…
