Circular to Unitholders - Suntec REIT

8. THE PROPOSED ISSUE OF CONSIDERATION UNITS TO THE VENDOR
8.1 Overview of the Issue of Consideration Units to the Vendor
The Acquisition involves the proposed issue of such number of new Units to the Vendor of an
aggregate value of S$94.15 million as partial consideration for the Acquisition. The issue price
for the Consideration Units will be equal to the volume weighted average price per Unit for all
trades on the SGX-ST, in the ordinary course of trading, for the last 10 Market Days prior to (and
excluding) the date of Completion. For illustrative purposes, assuming that the issue price for the
Consideration Units is equal to S$1.86, 50,615,887 Consideration Units will be issued to the
Vendor.
8.2 Requirement for Unitholders’ Approval for the Issue of Consideration Units to the Vendor
The Trust Deed provides that for as long as the Manager is the manager of Suntec REIT and
Cheung Kong and/or Mr Lim Hwee Chiang, John are controlling shareholders of the Manager,
all transactions between Suntec REIT and (i) Cheung Kong, (ii) Mr Lim Hwee Chiang, John
and/or (iii) an associate of Cheung Kong or Mr Lim Hwee Chiang, John shall be considered as
interested person transactions.
As the Vendor is a direct wholly-owned subsidiary of Cheung Kong and is therefore considered
an associate of Cheung Kong. In addition, as the Manager is 30.0% indirectly owned by Cheung
Kong, the Vendor is regarded as an associate of the Manager under the Listing Manual, and
Cheung Kong is regarded as a controlling shareholder of the Manager. As such, the Acquisition
will constitute an “interested person transaction” under Chapter 9 of the Listing Manual as well
as an “interested party transaction” under the Property Fund Guidelines.
8.3 Rationale for Issuing the Consideration Units to the Vendor
The issue of Consideration Units to the Vendor, as a wholly-owned indirect subsidiary of Cheung
Kong would align the interest of Cheung Kong with the Unitholders and demonstrate its
commitment and support to Suntec REIT.
8.4 Advice of the Independent Financial Adviser
Having considered the factors set out in the IFA Letter, and subject to the assumptions and
qualifications set out therein, the IFA is of the opinion that the issue of the Consideration Units
is on normal commercial terms and will not be prejudicial to the interests of Suntec REIT and its
minority Unitholders.
The IFA has therefore advised the Independent Directors to recommend that Unitholders vote in
favour of the issue of the Consideration Units.
8.5 Temporary Stock Counter
Suntec REIT’s policy is to distribute its Distributable Income on a quarterly basis to Unitholders.
In order to ensure fairness to holders of existing Units, the Consideration Units will only be
entitled to participate in Suntec REIT’s Distributable Income for the period commencing from the
date of the issue of the Consideration Units and thereafter. Suntec REIT will be announcing
cumulative dividends in respect of the period from 1 July 2007 to the day immediately preceding
the Issue Date.
The Consideration Units will be issued under a temporary stock counter, which will be
maintained for the period commencing from the Issue Date to Books Closure Date, which is
expected to be 7 November 2007. After the Books Closure Date, both the Consideration Units
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