Based on the announcement,Boustead Plantation Berhad had offered RM 2.1 for each unit of the REIT. This represent a premium over the NAV and the recent trading price.
Considering the direction of the CPO price going forward, it's not a bad deal for the unitholder. However - it's not easy to find a replacement for such a conservative dividend paymaster to replace Boustead Reit it one's portfolio.
The way the REIT is structured, there is minimal downside risk to the dividend due to the presence of the fixed rent portion in the rent formula.
I am guessing with the soft CPO price, the power to be in Boustead group figure it's costing them too much to be paying rent to the individual unitholder. They are better off terminating the lease agreement and taking the plantation asset in house, financed through debt alone.
Like I mentioned earlier in my last post - I don't have very much of these REIT left, yet I can't justify selling them as I am not too sure what to replace them with. Despite this, the premium proposed represent about 2 year's worth of dividend yield for the REIT, as such I MAY consider supporting the proposal. But I really should look harder at some replacement candidate.
To all other unitholder - what's your view? And if you accept the offer - what would you replace the REIT with?
No comments:
Post a Comment