Key Sentence:
- After a blockbuster deal that earned over half a billion, Chew Gek Khim of Straits Trading tries to get more returns through prudent investments.
After Chew Gek Khim, CEO of Straits Trading, took over one of Singapore’s oldest companies more than a decade ago, he had a plan to streamline the company’s pipeline business, spread interests, and create a promising investment company focused on high profitability in real estate. And hospitality.
He is restructuring and putting together new deals, such as a 20% purchase in Singapore’s ARA Asset Management in 2013. The move is now paying off. The private company just sold $5.2 billion, leaving Chew with a paper profit of $710 million ($526.5 million).
It will also be the third-largest real estate company in the region by market capitalization, ahead of some of the oldest Asian entrepreneurs such as Hong Kong Land and Wharf Holdings.
“By combining the two [companies we] can create as the Blackstone of Asia,” said the Chu.
It was also a massive win for Straits Trading – the second-largest shareholder in ARA at the time of the deal – and owns the rights to Chew, which paid $294 million for the shares eight years ago. “There were many opponents back then,” Chu recalled. “I don’t think people appreciate what a real estate investment manager is. People still traditionally think of real estate. You develop and sell or buy and hold.”
“Chew Gek Khim upset and angry that the market is not associating the fair value of NAV with [Straits Trading.”
ESR will pay Straits Trading $134.8 million in cash and $915.3 million in ESR shares, giving the Singaporean Chew company nearly 5% of the stake in the combined company. “If we believe in these huge creatures, then it makes sense to keep them all,” he said.
For Chew, one of Singapore’s richest women with a net worth of $1.65 billion (shared with her family), it’s all about creating long-term value in strait trade. The 133-year-old company was founded in 1887 by a Scot and German. Who saw treasure in the tin and was mapped out by their late grandfather Tan Chin Tuan. When he was their director, Singaporean banker and philanthropist added Straits Trading to stable company Oversea-Chinese Banking Corp… He then headed Straits Trading for 27 years until he retired in 1992. Which resulted in his transformation into a diversified group.
Chew Gek Khim and longtime business partner John Lim, the 65-year-old co-founder and co-chair of ARA.
Along with ARA’s US shareholders, privately held company Warburg Pincus and CK Asset Holdings Li Ka-Shing – have been assessing whether going public was a wise move. For the company of $95 billion (AUM). However, the deal with ESR gives the company a combined market cap of around $15 billion – triple the ARA for an IPO valuation of $5 billion. Lim declined to comment on this article.
“We believe bigger companies have better opportunities,” Chu said. “If you look at all the tech companies, they’re that big. Even a $5 billion company isn’t valued as high as a giant corporation. In an emailed statement, ESR Chair Jeffrey Perlman said the enlarged company, whose portfolio includes a $53 billion logistics warehouse and data center, will be able to attract global investors looking to raise capital with fewer managers having doubled in the last 12 months, rose to a seven-year high of $3.29 in August on news of selling ARA – after trading hard between $1.50 and $2.50, etc. between 2016 and 2020.