Should investors of Accordia Golf Trust run for their lives or fight to their very end by blocking the upcoming assets divestment deal? On 29 June, the trust announced that it is selling its 88 golf courses for $804.1 million. And then on 7 August, the trust came back with a revised offer of $848.4 million. The announcements sent Accordia Golf Trust share price to hit a three-year high.
Accordia Golf Trust debut in SGX mainboard only in 2014. So the divestment announcement should come as a shock to many investors as it is proposed that trust to be wind up after the divestment of the golf assets. Nevertheless, the proposed divestment did help to lift Accordia Golf Trust share price from $0.44 on 19 March to the recent $0.74.
The total distributions issued amounted to 31.42 cents. So for those who had held the units till now, the returns would have been quite decent. But I would not say that this counter is an ideal dividend play because Accordia Golf Trust share price has been pretty volatile in recent years.
As a matter of fact, it appears to me that Accordia Golf Trust is capable of self-imploding. This was what happened back in 2018 when Goldman Sachs sold its stake in late 2018, causing Accordia Golf Trust share price to plunge to a low of $0.50. Given the volatility of Accordia Golf Trust share price, expect the stock to bomb out if the divestment deal did not go through.
But let’s be clear: this is not a done deal yet. 14 September 2020 will be destiny day as shareholders will convene at the EGM to vote for or against the deal. Note that the proposed divestment will go through only if at least 50% of for votes are obtained. Given that the major shareholders currently hold a total of about 45% stake, the outcome is uncertain.
The turn of events are certainly intriguing for Accordia Golf Trust. In this article, I will share my insights on this business trust. Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in Accordia Golf Trust before. Whether Accordia Golf Trust share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
Accordia Golf Trust share price in end game?
Investors must be wondering why Accordia Golf Trust share price is currently being traded at levels below the exit offer price of $0.772. The primary reason could be attributed to the sell-offs from the minority shareholders. As explained above, it is uncertain if the proposed divestment would go through. Many minority shareholders may not want to take the risk and cash in right now.
In my opinion, the offer is [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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