Frasers Hospitality Trust Privatisation: Retail Investors Face Cash Exit as Sponsor Offers Premium—What You Must Know

Key Points from the Report

• Frasers Hospitality Trust (FHT) is set to be privatised via a trust scheme of arrangement by a wholly-owned subsidiary of Frasers Property Limited (FPL).
• Scheme Consideration: S\$0.710 per stapled security, fully in cash, representing an 11.1% premium over the latest adjusted net asset value (NAV) as at 30 April 2025.
• Premiums Over Historical Price Benchmarks: The offer price is at least 20% above the 1-, 3-, 6-, and 12-month volume weighted average prices (VWAPs) of FHT, and a substantial premium over historical price-to-NAV ratios.
• Strategic Review Background: Persistent macroeconomic headwinds, FX depreciation, higher interest rates, and sector underperformance drove the decision to privatise.
• Independent Financial Adviser (IFA) Deloitte & Touche: The terms are “Fair and Reasonable”, and the FHT Independent Directors unanimously recommend shareholders vote in favour.
• Key Approvals Required: Shareholder approval at the Scheme Meeting, court sanction, SGX-ST clearance, and Australian regulatory nod.
• Critical Dates: Proxy forms must be lodged by 12 August 2025. The Scheme Meeting will be held on 15 August 2025 at the InterContinental Singapore. If approved, cash payout is expected by 30 September 2025, with delisting on 6 October 2025.

What Retail Shareholders Need to Know—Potentially Price-Sensitive Information

1. Immediate Cash Exit at a Premium: Retail investors are being offered a cash payout at S\$0.710 per stapled security—a rate well above recent trading levels and NAV. This is a notable premium to both the current and historical values, providing an attractive exit in what has been a challenging environment for hospitality REITs.
2. Privatisation Driven by Structural and Macro Headwinds: The report points to irreversible structural challenges in the hospitality REIT sector, including currency depreciation against the SGD, persistent inflation, higher global interest rates, and underperformance versus other S-REIT asset classes. The Board sees little prospect for FHT to meaningfully grow distributions or NAV, making privatisation the most value-maximizing option.
3. Premium Over Previous Failed Offer: The current offer is superior to the 2022 privatisation attempt, with a higher premium over adjusted NAV (11% now vs. 7% then). This new premium reflects the latest property valuations and FX adjustments.
4. Comparatively Attractive Returns: For investors who entered at IPO and subscribed for the rights issue, the total return (including distributions) would be 27.8%—higher than that of FHT’s listed peers over the same period.
5. Shareholder Action Required: Approval thresholds are strict—over 50% in number and at least 75% in value of those present and voting at the Scheme Meeting must support the resolution. If the Scheme fails, FHT stays listed and no cash payout will be made.
6. Voting and Key Dates: Shareholders must act quickly—proxy forms are due by 12 August 2025, with the meeting on 15 August 2025. All votes count, and abstentions by certain related parties will apply.
7. Regulatory and Court Approvals Pending: The deal remains subject to multiple regulatory sign-offs and court sanction. Any delay or failure in approvals could impact the timeline or outcome.

In-Depth Details—What’s Behind the Privatisation?

The FHT Board, after a comprehensive strategic review with its financial advisers, found that FHT could no longer deliver meaningful growth for shareholders. Despite a recovery in operational metrics such as RevPAR (revenue per available room) post-pandemic, a combination of rising costs, unfavourable currency moves, and higher interest rates has kept distribution per stapled security below pre-COVID-19 levels.

Notably, FHT’s price-to-NAV and trading price have lagged behind both its own pre-pandemic levels and those of its S-REIT hospitality peers. Structural disadvantages—like smaller scale limiting access to cheap capital and index inclusion, geographic exposure to weakening currencies, and the cyclical, capital-intensive nature of hospitality assets—further undermine long-term value prospects.

The offer from Frasers Property’s subsidiary allows retail investors to exit at a price above recent trading and historical valuations. The IFA’s endorsement and the Board’s unanimous support underline the conviction that this is the best available route for value realization. Should the Scheme not pass, FHT remains listed, with shareholders continuing to face the sector’s structural headwinds.

Timeline: Key dates include submission of proxy forms (by 12 Aug), the Scheme Meeting (15 Aug), expected court sanction (5 Sep), last day of trading (11 Sep), record date (22 Sep), effective date (23 Sep), payout (30 Sep), and delisting (6 Oct). Shareholders should monitor for any updates or changes to these indicative dates.

Conclusion

This privatisation offer is a significant, price-moving event for FHT’s retail shareholders. The premium cash offer, set against the backdrop of chronic sector underperformance and structural limitations, is positioned as a rare opportunity for value realization. Shareholders should carefully consider the terms, act promptly on voting, and monitor for regulatory updates.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Retail investors should review the full Scheme Document, seek independent financial advice, and consider their own circumstances before making any investment decision.

View Frasers HTrust Historical chart here