PAG's bid for Spring REIT fails to get enough support (updated)

Spring Real Estate Investment Trust

29/11/2018 03:54

(Adds share move, company statements, background)
    Nov 28 (Reuters) - Hong Kong-based PAG's bid to buy Spring
Real Estate Investment Trust  1426.HK  fell through on Wednesday
after it failed to secure the required acceptances from the
realty firm's unitholders.
    Spring REIT's shares opened 12.7 percent lower on Thursday
morning, at HK$3.36, following the announcement after market
close on Wednesday. 
    In September, RE Strategic Investments, a unit of private
equity firm PAG, launched an unsolicited bid for Spring REIT,
and in October raised it to HK$5.30 per unit, or HK$6.73 billion
($859.93 million). The sweetened offer sent the REIT's shares to
an all-time high of HK$4.60.  urn:newsml:reuters.com:*:nL3N1X9584 urn:newsml:reuters.com:*:nL3N1XA1KX
 urn:newsml:reuters.com:*:nL4N1WC2AH
    PAG said on Wednesday that the acceptances it had received
combined with its own affiliate's stakes accounted for 41.5
percent of unitholders, below the 50 percent level required. 
    PAG currently has a 13.88 percent stake in Spring REIT,
according to Refinitiv data. 
    While launching its bid, PAG said it wished to replace
Spring REIT's existing manager, conduct a strategic review, and
that it opposed the REIT's management's plan to acquire a
shopping mall in Huizhou, in China's Guangdong province across
the border from Hong Kong.
    "We are pleased that this process has come to a conclusion,
allowing us to return our full attention to managing Spring
REIT," said Toshihiro Toyoshima, Chairman of Spring Asset
Management Ltd, in a statement late on Wednesday.
    This is not the first time that PAG has clashed with Spring
REIT's management. Last year, the private equity firm attempted
to have the REIT's manager, Spring Asset Management Ltd, removed
from its position, but the proposal was rejected at an EGM.
    "PAG is not going anywhere.... In our opinion, the manager's
actions thus far continue to demonstrate questionable governance
and decision-making practices, to the detriment of independent
unitholders," said PAG Real Estate Partner Broderick Storie in a
statement. 
    ($1 = 7.8262 Hong Kong dollars)

 (Reporting by Nikhil Kurian Nainan in Bengaluru and Alun John
in Hong Kong; Editing by Anil D'Silva and Sunil Nair)
 ((NikhilKurian.Nainan@thomsonreuters.com; +91 806 749 1637;
Reuters Messaging:
nikhilkurian.nainan.thomsonreuters.com@reuters.net))