First Reit - proposed acquisitions and rights issue - 9 NOV 2010

First Reit - proposed acquisitions and rights issue & receipt of approval in-principle for the listing of new units:

• Press Release
• Announcements
• Presentation Slides

Key Points

• First Reit to acquire two Jakarta hospitals for a purchase consideration of S$205.5 million to be funded partially by Rights Issue of 345,664,382 new units.
• The Mochtar Riady Comprehensive Cancer Centre (“MRCCC”) is being acquired from Wincatch Limited, an unrelated third party, for S$170.5 million, and Siloam Hospitals Lippo Cikarang (“SHLC”) is being acquired from the sponsor of First REIT, PT Lippo Karawaci Tbk, for S$35.0 million.
• The respective purchase prices of MRCCC and SHLC represent an attractive discount of 19.7% and 13.8% respectively to the average of the properties' latest independent valuations.
• The Acquisitions will increase First REIT‟s assets by 74.3% to S$603.4 million.
• The rights issue will raise approximately S$172.8 million in gross proceeds.
• The rights issue will be on a pro rata basis of five Rights Units for every four existing Units, at S$0.50 each (fractional entitlements to be  disregarded).  
• The Rights Issue books closure date will be at 5.00 p.m. on 3 December 2010.
• The Issue Price represents a discount of 47.4% to the closing price of S$0.95 per Unit on 4 November 2010 (the “Closing Price”).

Author's Note

First Reit has finally announced new acquisitions after a long wait, and a very significant one relatively to its existing assets. For quite sometime the Reit has been rather quiet, with the DPU being relatively constant from quarter to quarter. However, there has been quite a noticeable surge in its share price recently, which closed at a all time high of 0.980 cents on 8 Nov 2010, just a day before the release of this announcement.