FHT share price scored own goal
What a disaster! Frasers Hospitality Trust (FHT) share price became the talk of the town following the shocking failed attempt to privatise the S-REIT. 74.88% of the votes were cast in favour of the privatisation, just a whisker short of the 75% required for the deal to push through. Consequently, FHT share price suffered a catastrophic meltdown, falling by 23% to reach $0.54 within a week.
The failed privatisation deal, coupled with the devastating fallout for FHT share price, should be a surprise outcome for Thai billionaire Charoen Sirivadhanabhakdi. After all, Frasers Logistics & Industrial Trust (FLT) and Frasers Commercial Trust (FCOT) were merged successfully in 2020 without any hiccups. Many investors had anticipated a “straightforward outcome” for the privatisation scheme. In this regard, the coming days should see plenty of reckoning among FHT unitholders.
An SG Wealth Builder had enquired what will happen next for FHT and if there are any such precedents. Off-hand, all I can say is that it should be business as usual for FHT unitholders but the implication for FHT share price is another ball game altogether. I will elaborate further on this later.
In terms of similar cases of privatisation flops in SGX, the attempts by OCBC to privatise Great Eastern Holdings in 2004 and 2006 came to mind. Back then, the minority shareholders of Great Eastern Holdings refused to sell their stakes to OCBC, thereby torpedoing the privatisation deals. In the context of S-REITs, I could not recall another similar case of privatisation flop. In the case of FHT, the scheme did not even pass the number votes required for privatisation.
The coming weeks should see plenty of volatility for FHT share price due to short-selling activities. Complicating matters is the upcoming release of full-year financial result, which should be positive in my view. Hence, there is a strong possibility of FHT share price making a swift recovery following the recent crash.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in FHT before. Whether FHT share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
FHT share price faces headwinds
In my opinion, the offer price of $0.70 per unit is actually [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
For members of SG Wealth Builder logging in from Apple or Mac devices, please access through this link. This allows for one-time log in only (instead of having to key in user-id and password twice).
You may sign up to become a member of SG Wealth Builder. The full benefits and privileges of SG Wealth Builder Membership:
- Access to the latest premium articles of SG Wealth Builder
- Email notifications of latest blog articles
- Request for coverage on stocks, insurance and other personal financial topics
- Comment in articles
Monthly Subscription Plan
You may sign up for the monthly subscription for only $19.99 per month! You can choose to cancel the subscription after one month with no penalty.
This plan is ideal for readers who wish to try out SG Wealth Builder Membership for a limited time. Thereafter, you may choose to upgrade to Lifetime Membership for a one-off payment. Email me (firstname.lastname@example.org) to find out more about the Lifetime Membership.
Note: After payment is made, you will be prompted with registration form to create your user-id and personal password.