The $1.4 billion offer lodged out of the blue for Fraser & Neave's (F&N) hospitality business last week has focused the market's attention on the conglomerate's wider property division.
The offer from Overseas Union Enterprise for Frasers Hospitality includes a 20 per cent premium to the asset value, which was assessed at about $1.17 billion as at June 30.
This includes serviced apartments such as Fraser Place Singapore and Fraser Suites Beijing, as well as other buildings across the world.
Frasers Hospitality has been expanding aggressively, growing into one of the leading Asian brands in the sector. It is expected to own or manage 73 properties in 39 cities, with more than 12,200 apartments, by 2014.
It also launched Capri by Fraser - essentially a hybrid serviced apartment-hotel - in May, joining its other brands, Fraser Suites, Fraser Place, Fraser Residence and Modena.
Frasers Hospitality is also enlarging its footprint in the Middle East. Chief executive Choe Peng Sum said earlier this year that it plans to manage 10 properties in the region over the next few years. One will be in Suhar in Oman, and one each in Riyadh and Khobar in Saudi Arabia.
The firm is also looking to enter new markets such as Kuwait and Abu Dhabi, and strengthen its position in Dubai, Doha and potentially Bahrain.
All of its contracts in the Middle East are management ones, which means it runs the operations there but does not own the buildings.
Yet Frasers Hospitality is just 14 per cent of F&N's property business, which has a total asset value of $8.2 billion as at June 30, as reported by the firm.
JP Morgan, appointed to advise the independent directors on the buyout offer for F&N by Thai billionaire Charoen Sirivadhanabhakdi, estimates the division's value at $4.4 billion to $6.8 billion.
Its figure is lower because it factored in a discount to the book value, derived from the discount other comparable listed companies have. F&N's property arm, Frasers Centrepoint, has a large presence in a range of property sectors.