The proposed merger of Frasers Commercial Trust (FCOT) and Frasers Logistics & Industrial Trust (FLT) is good news for me. I have some shares of FCOT which I bought earlier this year at a cost of $1.365 per share. Following the merger, I would get $0.151 for each FCOT share and also 1.233 FLT shares for each FCOT share I have.
If I only look at the $0.151 cash per share that I would receive, I would make a 11% return from this merger. If I subsequently also sell off the FLT shares that I would have after the merger, and managed to sell them off at $1.24 (which is the issue price and also the market closing price today for FLT), I would make a 23% return.
The dividends to be paid out is expected to increase after the merger, and from my calculation, it would translate into a dividend yield of about 9% based on my own cost. As such, I would keep the shares for dividends instead of selling them.
I'm glad that I bought some FCOT shares earlier this year! Shall continue to save and invest for a better tomorrow!