Keppel rises 6.1% after M1-Simba deal falls through

[SINGAPORE] Shares of Keppel rose on Friday (May 22) after the company confirmed the termination of its proposed divestment of M1’s telco business to Simba Telecom.

As at 9.04 am, the stock climbed 6.1 per cent or S$0.64 to S$11.06 with 932,800 shares changing hands.

By 9.59 am, Keppel shares had settled at S$10.88, still up 4.4 per cent or S$0.46, with 2.7 million shares transacted.

On Friday morning, Simba parent Tuas Ltd and Keppel announced in separate statements that the proposed divestment of Keppel’s telco business, M1, to Tuas had fallen through.

The deal, which was valued at S$1.4 billion, was originally announced in August 2025.

The deal fell through after Keppel failed to obtain relevant approvals from the Infocomm Media Development Authority (IMDA) by the extended long-stop deadline on Thursday.

This followed IMDA’s ​announcement on Monday that it has halted assessment of the proposed M1-Simba consolidation, after learning that Simba was in possible breach of the Singapore’s Telecommunications Act.

Earlier this week, Keppel shares slid as much as 5 per cent on Monday after IMDA announced the stalled merger, whlie Tuas shares also fell more than 60 per cent.

IMDA said that Simba could have used radio frequency bands it was not assigned to provide mobile services.

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Keppel, Tuas confirm M1-Simba deal dead in water

On Wednesday, Keppel announced that it ranked in the top 1 per cent in the industry in the S&P Global Sustainability Yearbook 2026, which distinguishes companies that have demonstrated strengths in corporate sustainability. 

This makes it the only Singapore company ranked within the top 10 per cent of their industries.

Keppel was also included as a constituent of both the Dow Jones Best-in-Class World Index and the Asia Pacific Index for the fourth consecutive year.

Analysts’ reactions mixed

JPMorgan on Thursday upgraded Keppel to “overweight” from “neutral” and forecasted a special dividend of S$0.08 for FY2026 and a total dividend of S$0.42.

Similarly, UOB Kay Hian (UOBKH) on Tuesday maintained its “buy” call on Keppel, with a target price of S$13.23, noting that Keppel’s goal to monetise S$2 billion to S$3 billion in non-core assets remains intact.

UOBKH analyst Adrian Loh said on Tuesday that the pause in the M1-Simba merger is being used to improve M1’s financials and realise a “robust future exit valuation”.

This comes as Keppel pivots to its Plan B – a 90-day plan to rightsize and restructure its business – and pursues a near-to-medium-term aim to achieve a higher run-rate earnings before interest, taxes, depreciation and amortisation, said Loh.

However, CGS International (CGSI) on Monday downgraded Keppel to a “hold” rating from its previous “add” after news of the M1-Simba merger’s delay.

CGSI cut its target price for Keppel by 14.9 per cent to S$11.50 from S$13.52, noting that the "unfavourable” delay could slow the pace of monetisation.

“With the latest development, we conservatively cut our dividend per share (DPS) assumptions to S$0.45 (from S$0.48), comprising S$0.28 normal DPS and S$0.16 special DPS,” said CGSI analysts Lim Siew Khee and Meghana Kande.