Singapore investors are very obedient
News came in and said that the chain offer for SPH REIT $PARAGONREIT(SK6U.SG$ has turned unconditional and that the Offeror, Cuscaden Peak, has increased its stake to 51.96% in the REIT.
The quick recap is that this Offer has to be made to SPH REIT unitholders due to Cuscaden Peak's acquisition of SPH's real estate portfolio. The Offer was conditional on that Cuscaden Peak will cross the 50% ownership mark and it did with this exercise.
The Offer wasn't a great one as it was 3.9% below the last traded price and 2.8%. Even though the share price has dropped by 3.5%, the Offer price is still below what could be sold in the open market.
Yes, one may argued that accepting the Offer does not need to pay brokerage fees. It is a valid reason if the commission rate is at a minimum $25+++ or 0.28%. But today lower commissions are available and it is still cheaper to sell in the open market than accepting the Offer.
Despite this uninspiring Offer, a significant number of units were tendered - 4.64% of SPH REIT worth S$123m.
I am saddened by this because Dr Wealth has explained it in an article and a video. I believe many influencers have shared their views too. Well, we are not saying that we are right but I just hoped that investors have understand the Offer more before making a decision.
Why would they accept the Offer. There could be many reasons.
Perhaps some unitholders needed the money.
Perhaps some unitholders wanted to save on commissions.
Perhaps some unitholders got spooked by the "mandatory" Offer and thought one must accept if not their money is gone.
I can't prove it but I think the last scenario might be the majority. Singaporeans are an obedient bunch and often look up to authorities for instructions.
It is evident even in the recent offers. The market, which is made up of investors, actually 'comply' with the offer prices.
SPH REIT price came down to $0.945 which is close to the Offer price of $0.9372.
Earlier, APAC Realty $APAC Realty(CLN.SG$ shareholders received a $0.57 Offer and the share price has since dropped 28% to $0.58. Again, close to the Offer price.
Investors are so well-behaved! They take whatever prices were given to them without any independent thinking.
Anyone can make an offer but it doesn't mean you must accept it without evaluating the deal.
There's still a lot to do on improving financial literacy.
The quick recap is that this Offer has to be made to SPH REIT unitholders due to Cuscaden Peak's acquisition of SPH's real estate portfolio. The Offer was conditional on that Cuscaden Peak will cross the 50% ownership mark and it did with this exercise.
The Offer wasn't a great one as it was 3.9% below the last traded price and 2.8%. Even though the share price has dropped by 3.5%, the Offer price is still below what could be sold in the open market.
Yes, one may argued that accepting the Offer does not need to pay brokerage fees. It is a valid reason if the commission rate is at a minimum $25+++ or 0.28%. But today lower commissions are available and it is still cheaper to sell in the open market than accepting the Offer.
Despite this uninspiring Offer, a significant number of units were tendered - 4.64% of SPH REIT worth S$123m.
I am saddened by this because Dr Wealth has explained it in an article and a video. I believe many influencers have shared their views too. Well, we are not saying that we are right but I just hoped that investors have understand the Offer more before making a decision.
Why would they accept the Offer. There could be many reasons.
Perhaps some unitholders needed the money.
Perhaps some unitholders wanted to save on commissions.
Perhaps some unitholders got spooked by the "mandatory" Offer and thought one must accept if not their money is gone.
I can't prove it but I think the last scenario might be the majority. Singaporeans are an obedient bunch and often look up to authorities for instructions.
It is evident even in the recent offers. The market, which is made up of investors, actually 'comply' with the offer prices.
SPH REIT price came down to $0.945 which is close to the Offer price of $0.9372.
Earlier, APAC Realty $APAC Realty(CLN.SG$ shareholders received a $0.57 Offer and the share price has since dropped 28% to $0.58. Again, close to the Offer price.
Investors are so well-behaved! They take whatever prices were given to them without any independent thinking.
Anyone can make an offer but it doesn't mean you must accept it without evaluating the deal.
There's still a lot to do on improving financial literacy.
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TaurusX3 : I was one of those affected. I chose not to take up the offer.
TaurusX3 : Didn’t gain much for not accepting the offer either.
xmomentx : Can only say some ppl are brainless without much thoughts especially for APAC Reality case .. for SPH Reit .. another factor can be due to downward spirals for all other reits .. Some shareholders feel that once offer expired , the price will fall to below 90 cents
103005792 : i am waiting for the offer to expired. The price will go up to $1.0 or higher due to the high dividend yield of >5.7%.
102232720仗义执言 : The offer price is too low. Shouldn't take it.
102232720仗义执言 xmomentx: Me too.
102232720仗义执言 xmomentx: Yes YOU'RE RIGHT
SHARE MUST BE UNITED.
luvvies : are they going to delist? and if delist, how do we trade it after?