CapitaLand Invest - merger with Mapletree to become Singapore's largest real asset manager?
The Wall Street Journal reported yesterday that $CapitaLandInvest(9CI.SI)$ and Mapletree Investments are exploring a potential merger
"The plans are in the very early stages and a deal may or may not materialise, " according to WSJ
Macquarie Research (MQ) has weighed in with key numbers to note from such a possibility: Potentially another deal of the decade
– It has reported that Mapletree Investments (MIPL) and CapitaLand Investment (CLI) are exploring a potential merger.
– This is not the first time this news has emerged, and the article said, "The plans are in the very early stages, and a deal may or may not materialise."
– CLI responded that "it does not comment on rumours or speculation."
Some key numbers (based on the companies' latest financial reports)
– Funds under management: i) CLI (Jun25) at S$117 billion, ii) MIPL (Mar25) at S$80.3 billion. A simple aggregate totalling to S$197 billion, close to CLI's 2028-30 target.
– MIPL assets under management (ex-REIT) of S$42 billion (Mar25). Three largest segments (ex-REIT) for MIPL: North America (38% of funds under management/assets under management), China (18%), and UK (11%), versus CLI: China (53%); Australia, Japan, South Korea (25%); and SEA (16%).
– One of MIPL's key portfolios includes student housing (assets under management of S$5.3 billion).
Another CapitaLand+Ascendas Singbridge deal?
– While the devil is in the details and if it materialises, the merged entity could be Temasek's largest global real asset manager. MQ initiated on CLI recently with an Outperform rating and 12-month target price of S$3.30 based on a Sum-of-Parts stock methodology. – With the 2019 CapitaLand+Ascendas merger, Ascendas was acquired via 50%:50% in cash:shares. Subsequently, Ascott Residence Trust (ART) merged with Ascendas Hospitality Trust (AHT) to become the current CapitaLand Ascott Trust (CLAS).
Note: Macquarie Research is independent from the Warrants business, what the Macquarie Warrants desks quote from Macquarie Research may not reflect the complete analysis of Macquarie Research on the relevant company over time.
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Macquarie has a trending CLI call warrant $CapitalandInvMBeCW251230(QXHW.SI)$ (https://warrants.com.sg/tools/livematrix/QXHW ) which currently trades at SGD 0.008 vis-a-vis CLI’s current price of $2.67, and moves approximately 10.8 times more than CLI shares based on its effective gearing level. Investors seeking a magnified exposure to further upside in CLI shares may wish to consider using the call warrant, although it must be noted that the geared effect works both ways. There is no put warrant available over CLI.
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