Cuscaden Peak, the sponsor of Paragon REIT (SGX:SK6U), has made an offer to privatize the REIT at SG$0.98 in cash per unit, according to a filing with the Singapore Exchange on Tuesday.
The scheme consideration represents a 7.1% premium to the closing price of the REIT's shares of SG$0.89 on Feb. 10.
Additionaly, the REIT will pay H2 2024 cash distributions of SG$0.0233 per unit.
The REIT has faced low free float and trading liquidity which has impacted its ability to access capital markets and expand its existing portfolio.
Moreover, the REIT's total assets have grown 1.3 times since its initial public offering back in July 2013, compared to the average of 2.9 times for other REITs.
Through the scheme of arrangement, the offeror expects to oversee a significant asset enhancement initiative to maintain the REIT's long-term viability.
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