Offer of 46.5c per unit for Sabana REIT by Volare Group.

This blog is in response to a reader's comment on Sabana REIT being taken over by a substantial shareholder.

I was replying to the reader's comment but it got pretty long.

So, I am publishing the reply as a blog instead and more people can eavesdrop as I talk to myself.

AK talks to himself:

It seems that Volare Group isn't buying the entire REIT.

Just a partial offer for 10% of the REIT at 46.5c a unit.

It is at a rather big discount to Sabana REIT's NAV but, given the much higher risk free rate today, it is probably not too bad a price.

I remember blogging about what I thought a fair price might be for a buyer to offer for Sabana REIT.

That was in relation to the low ball offer made by ESR REIT at the time.

I suggested a price of 48c a unit.

46.5c isn't too far off and back when I suggested 48c a unit, interest rate was way lower too.

For anyone who is interested, you will find my take on the matter in the following blog:

4Q 2020 passive income.

The fact that Volare Group is going to pay 46.5c per unit in today's high interest rate environment for Sabana REIT supports the argument that ESR was really trying get Sabana REIT for a song back in 2020.

Shame on ESR.

Shame on all the people who said it was a good deal and that Sabana REIT's minority shareholders should accept the scheme.

Yes, that's what they called it.

A scheme.

So scheming.

This offer by Volare Group is an affirmation of Sabana REIT's attractiveness as an investment for income even in today's environment.

Most of my investment in Sabana REIT, around 80%, was made at 35c a unit with the balance made up of a small legacy position and also around 15% added more recently.

So, if the REIT should be 100% taken over at an offer price of 46.5c a unit, I suppose it would not be a bad outcome for me.

To be quite honest, however, I wouldn't be celebrating.

It would most likely be a bitter sweet moment as it would remind me of Saizen REIT, Croesus Retail Trust, Accordia Golf Trust and Religare Health Trust.

All of them were pretty good investments for income with my entry prices but I was forced to take the capital gains as they were all delisted at one point or another.

I am still keen on keeping Sabana REIT as an investment for income.

I don't want to have to look for replacement investments for income. 

After having spent too much time in 2022 reallocating resources, I am looking forward to being lazier in 2023.

Reference:
Largest investments updated.