" We reward shareholders with a special dividend whenever substantial shareholder value is unlocked"

Straits Trading, following exceptional gains of more than $1 billion from the divestment of its stake in ARA Investment, is offering shareholders a distribution in specie worth some 50 cents per share.

 

Shareholders can choose between receiving 180 Straits Trading shares, or 145 ESR shares.

 

Last year, Hong Kong-based real estate manager ESR acquired ARA Investment for US$5.2 billion. Straits Trading held a stake of around one-fifth in ARA Investment.

 

The transaction was completed in Jan 20 and Straits Trading booked a gain of $142.5 million in cash plus 214.7 million ESR shares. The total gain of $1,076.5 million represented an 18.2% IRR, or 3.7 times equity multiple over Straits Trading&rsquo s original cost of investment in ARA.

 

According to Straits Trading, the dual arrangement of offering either Straits Trading' s shares, or Hong Kong-quoted ESR shares, which closed at HK$19.86 on Aug 12, will give its shareholders the flexibility to choose how they would like to participate in Straits Trading&rsquo s growth.

 

&ldquo With the successful divestment of ARA, this special dividend serves to reward our shareholders for their continued support and enables them to participate further in our growth,&rdquo says Straits Trading&rsquo s executive chairman Chew Gek Khim.

 

&ldquo We are continuing our track record of rewarding shareholders with a special dividend whenever substantial shareholder value is unlocked,&rdquo she adds.

 

Straits Trading will call seek shareholders&rsquo go-ahead for this proposal at an EGM to be called.