Confirmed: John Lim-led consortium to buy out ARA Asset Management in $1.8 bil deal

ARA Asset Management on Tuesday announced a joint proposal by a consortium led by group founder and chief executive officer John Lim to privatise the company in a takeover offer at $1.78 per scheme share.

At this offer price, which exceeds the highest closing price of ARA shares over the past 2.5 years, the company is valued at close to $1.8 billion.

The consortium, which has proposed the privatisation and delisting of ARA from the SGX-ST, comprises Lim’s JL Investment Group (JLIG) along with Straits Trading Company and Cheung Kong Property, in partnership with Warburg Pincus and Avic Trust.

JLIG, Straits Trading, and Cheung Kong Property are the existing controlling shareholders of ARA with a collective stake of 46.24% as at Nov 8.

The takeover will be undertaken through a scheme of arrangement by offeror Athena Investment Company (Cayman), a special purpose vehicle incorporated for the purpose of the acquisition.

In a statement on Tuesday, the consortium said the offeror does not intend to increase the scheme consideration of $1.78, which will represent the final price for each scheme share.

DBS Bank and Goldman Sachs (Singapore) are the joint financial advisers to the offeror in connection with the acquisition and the scheme.

The consortium said the successful completion of the acquisition will not trigger any takeover offer for any publicly listed REITs currently managed or owned by ARA.

“A deeper capital base well-positions ARA in executing its business strategies going forward, including tapping growth opportunities through the network of our new partners,” said Lim.

In a separate filing, ARA said it posted an 84% rise in 3Q earnings to $31.5 million on the back of higher revenue from management fees.

Revenue rose 39% to $52.9 million on 5% higher management fees of $34.7 million and finance income more than quadrupled to $17.1 million.

Shares of profit of associates and joint ventures, net of tax, more than doubled to $1.46 million.

Total expenses widened 5% to $18.7 million.

Units of ARA Asset Management last closed at $1.495 on Nov 3.

This article first appeared in The Edge Singapore Market Report.

The Edge Markets helps its readers to make better business and investment decisions by empowering them with the latest financial news, data and analytics. The Edge Markets is part of The Edge Media Group.

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