KEPPEL Corp has raised its privatisation offer for Singapore Press Holdings (SPH) to S$2.351 per share.

The offer comprises cash of S$0.868 per share, 0.596 Keppel Reit unit (valued at S$0.685 as at Nov 9) and 0.782 SPH Reit unit (valued S$0.798 as at Nov 9) per SPH share.

The story so far

Keppel first made a privatisation offer for SPH's non-media business in August through a scheme of arrangement.

The first offer was S$2.099 per share, comprising cash of S$0.668 per share, 0.596 Keppel Reit unit (valued at S$0.715) and 0.782 SPH Reit unit (valued at S$0.716) per share.

The offer was subject to approval from SPH shareholders for the restructuring of the media business, which was received in September.

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On Oct 29, a consortium of companies comprising Hotel Properties (HPL) and its managing director Ong Beng Seng, and 2 Temasek-linked entities, CLA Real Estate and Mapletree Investments, launched a surprise rival offer for SPH.

The consortium vehicle, Cuscaden Peak, offered S$2.10 per share in cash.

Late on Tuesday (Nov 9) night, Keppel said it would beef up the cash component of its offer for SPH by S$0.20 per share to S$0.868 per share.

What SPH management has said

SPH will still consider superior offers - from Cuscaden or any other party - if there is one. Cuscaden or any interested parties have till Nov 16 to work on a better deal.

But SPH chief executive Ng Yat Chung also said in a briefing on Nov 10 that Keppel's final offer is currently the best on the table. "We still have to look at what the price is and what the regulatory requirements are, and as of now, Keppel definitely is ahead on this one, because they basically cleared everything," he added.

What Keppel management has said

Keppel said its revised offer price reflects a change of conditions.

SPH, which publishes The Business Times, posted a net profit of S$92.9 million for the full year ended Aug 31, reversing from a net loss of S$83.7 million the year before, on improved performance across all its non-media business segments.

Said Keppel's chief executive Loh Chin Hua: "I want to stress that this remains a very attractive and strategic portfolio for Keppel. Yes, (we) have to pay a bit more, but this additional consideration is well supported by the improvement in values since July."

The higher cash consideration is expected to increase Keppel's pro forma net gearing by 0.03 time after the transaction, but the group's pro forma net gearing should remain below 1 time.

Loh said this will leave Keppel "adequate capacity" to pursue other business opportunities.

The higher cash offer will not impede the potential merger between Keppel's offshore and marine (O&M) arm and Sembcorp Marine, nor impact Keppel's dividend for 2021.

What's next for SPH shareholders

SPH will hold a scheme meeting by Dec 8 to give shareholders the chance to vote on Keppel's offer.

SPH is obliged to hold the scheme meeting whether or not the directors eventually recommend the Keppel proposal. If a better offer emerges for SPH, the directors may not recommend the Keppel proposal.

If the scheme is approved by shareholders and sanctioned by Singapore's High Court, SPH shareholders can expect to receive the final consideration by mid-January 2022. 

READ MORE: 

• SPH open to considering all offers that are better than Keppel's: CEO 

•  Higher offer price justified by better SPH financials, economic environment: Keppel 

• BT Explains: Why is Ong Beng Seng interested in SPH?

• BT Explains: Keppel's bid to take SPH private