Sydney, 28 October 2008
Macquarie Group (Macquarie) announced today that it has entered into an agreement to sell its approximate 26 per cent holding in Macquarie Prime REIT (MP REIT), as well as its 50 per cent interest in the holding company of the REIT’s Manager and Property Manager, to YTL Corporation Berhad (YTL Corp) for an aggregate upfront consideration of S$285 million.
Under the terms of the agreement, Macquarie has committed to sell to YTL Corp:
Macquarie had supported the initiation of a review by the Board of Directors of MP REIT in February 2008 to consider strategic options for the REIT with the specific objective of enhancing value for unit holders.
While the review considered the potential to provide unit holders with a proposal to acquire 100 per cent of MP REIT units, the REIT Manager has confirmed today that no firm offer was received in the current challenging capital markets environment.
A number of parties however expressed their interest in Macquarie’s strategic stake in the REIT and also its stake in the REIT and Property Managers. After consideration of all options, including the benefits that the new sponsor could bring to the REIT, Sale and Purchase Agreements have been entered into with YTL Corp for Macquarie’s investments in both the REIT and the holding company of the REIT Manager and the Property Manager.
YTL Corp has an established track record in developing and managing real estate, including Malaysia’s largest REIT, Starhill REIT.
Upon completion of the sale under the Sale and Purchase Agreements, YTL Corp will become both the 50 per cent owner of the REIT Manager and the Property Manager, as well as one of MP REIT’s largest stakeholders. There will be no disruption to the business or operations of MP REIT, the REIT Manager, or the Property Manager.
For Macquarie, the proposed transaction, which is subject to regulatory and YTL shareholder approvals, represents an opportunity to realise the value in its investment in MP REIT, the REIT Manager and the Property Manager and explore opportunities to redeploy capital into new growth areas.
The value of MP REIT units (“Units”) and the income derived from them may fall as well as rise. The Units are not obligations of, deposits in, or guaranteed by, the REIT Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request the REIT Manager to redeem their Units while the Units are listed. It is intended that unitholders of MP REIT may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.
This document is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for the Units. The past performance of MP REIT is not necessarily indicative of the future performance of MP REIT. This document may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income, changes in operating expenses (including employee wages, benefits and training costs), property expenses and governmental and public policy changes. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on the REIT Manager’s view of future events.
Macquarie Bank Limited ABN 46 008 583 542 (MBL) holds a 50% indirect interest in the REIT Manager. The REIT Manager and MRES are not an authorised deposit-taking institutions for the purposes of the Banking Act (Commonwealth of Australia) 1959, and each of the REIT Manager's and MRES’ obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of the Manager or MRES. MBL does not carry on banking business in Singapore. MBL and its related corporations do not hold a license under the Banking Act, Chapter 19 of Singapore and therefore are not subject to the supervision of the Monetary Authority of Singapore in respect thereof.