Battle for SPH: Cuscaden wants both scheme meetings to be held at same time

BOTH the scheme meetings in relation to the proposed privatisation of Singapore Press Holdings (SPH) should be held at the same time for shareholders to decide, said Cuscaden Peak on Tuesday (Nov 16).

The Cuscaden consortium - comprising Hotel Properties (HPL), its managing director Ong Beng Seng, as well as two Temasek-related entities CLA and Mapletree - is battling Keppel Corporation to acquire SPH, with both offerors seeking to do so via a scheme of arrangement.

According to the indicative timeline set out by SPH, the scheme meetings will take place sequentially. Shareholders will vote on Keppel's scheme first, by Dec 8.

They would be allowed to vote on the Cuscaden scheme only if the Keppel scheme is voted down, and the indicative timeline has set the second scheme meeting for January next year.

"We want our meeting to be held at the same time as Keppel's," said Christopher Lim, group executive director at HPL, during a media briefing on Tuesday. "In our view, that is the only fair and appropriate procedure - to put the two schemes together side by side, to be decided upon by shareholders at the same meeting at the same time, not 8 weeks later.

"We are actually disappointed that we are not able to hold our scheme meeting at the same time as Keppel," he said, adding that the consortium will explore all other options it can to change the situation.

On Monday (Nov 15), Cuscaden raised its offer for SPH by giving shareholders the option of either an all-cash offer of S$2.36, or S$2.40 per share comprising S$1.602 cash and 0.782 of an SPH Reit unit through a distribution-in-specie by SPH.

SPH has said that this consideration is a superior offer to Keppel Corp's revised final offer - which is S$2.351 per share, consisting of S$0.868 per share in cash, 0.596 of a Keppel Reit unit and 0.782 of an SPH Reit unit - made last week.

Lim added that Cuscaden has not declared its offer to be final, unlike Keppel. "Our offer is not subject to that restriction of not being capable of being revised upwards," he said. "I'm not saying that we will. But I'm just saying that is the position."

Even though the SPH directors are not recommending shareholders vote in favour of the Keppel offer, SPH must still hold a scheme meeting to get shareholders' votes on Keppel's proposed scheme of arrangement in line with the implementation agreement signed.

Under the supplemental letter signed on Nov 9 as part of Keppel's revised offer, it was indicated that the Keppel scheme meeting shall be held prior to any scheme meeting to be held in relation to any competing offer. SPH shall not take any action to hold an alternative scheme meeting within 8 weeks from the date of the Keppel scheme meeting, but this could be waived if shareholders do not approve of the Keppel scheme.

When asked on Monday whether the Keppel scheme meeting could be called off, SPH chief executive Ng Yat Chung said at a briefing that the ultimate decision would be for Keppel to take; and that SPH has not received any indication that Keppel has decided otherwise.

"I apologise if it's a bit inconvenient for shareholders... we are where we are today, because at any one time, the company wants to put the best available offer on the table for the shareholders," he had said.

HPL's Lim noted that this means shareholders who find the Cuscaden scheme more attractive cannot simply wait to vote on the scheme, as they would need to first turn down the Keppel scheme at the earlier meeting or the Cuscaden scheme would not have a chance.

"The bigger issue, to me, is that shareholders may not understand how things work; because - don't forget - there are about 60,000 shareholders for SPH, and they are all largely retail shareholders. Not all of them are able to comprehend such complicated schemes."

He said: "The 8 weeks restriction is something that Keppel and SPH has agreed to. It's got nothing to do with takeover code. It's got nothing to do with the stock exchange regulations. It is purely a commercial thing that has been agreed."

He added that Cuscaden is also "very well-prepared" to make submissions to the Singapore Exchange on its circular, but the Keppel Scheme meeting would need to take place first before the consortium would be allowed to do so.

When asked why Cuscaden did not make its offer earlier, Lim noted that there was no firm deadline indicated prior to Keppel's revised offer. He added that theirs was a consortium of three large property companies, and the range of assets owned have synergistic value to SPH. He also emphasised that the value of their original S$2.10 all-cash offer was also not a small amount of money.

The difference in completion timeline between the two schemes is "very marginal", Lim added. "We have already made all the submissions that are required to be made, and everything is at quite an advanced stage of approval."

READ MORE:

• BT Explains: Keppel's counter offer for SPH
• Cuscaden will have to offer minimum chain offer price of S$0.964 per SPH Reit unit
• HPL, Ong Beng Seng, Temasek units CLA and Mapletree in rival offer for SPH
• Keppel makes surprise S$2.2b bid to privatise SPH
• BT Explains: Keppel's bid to take SPH private
• BT Explains: Why is Ong Beng Seng interested in SPH?