Keppel says offer for SPH firm and irrevocable, provides shortest time to pay-out

Vivienne Tay

Published Tue, Nov 16, 2021 · 08:27 AM

KEPPEL Corporation BN4 on Tuesday (Nov 16) reiterated that its offer for Singapore Press Holdings (SPH) T39 is : T39 0% "firm and irrevocable" and also provides the shortest time to pay-out by mid-January 2022 for SPH shareholders.

Keppel's statement comes one day after the consortium comprising Hotel Properties (HPL), businessman Ong Beng Seng, and two Temasek-linked entities, CLA and Mapletree raised its offer for SPH. Keppel had days before, raised its bid too.

Cuscaden Peak is now offering each SPH shareholder the option of 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.

The Cuscaden scheme is expected to be completed by February 2022, but its scheme meeting can only proceed if SPH shareholders vote against Keppel's offer at Keppel's scheme meeting to be held by Dec 8.

Keppel said in its latest press statement that its final consideration of S$2.351 per SPH share as at Nov 9 represents a compelling 57 per cent premium to SPH's undisturbed trading price Mar 30. The final consideration will depend on the unit prices of Keppel Reit K71U and SPH Reit SK6U. : SK6U 0%

It has also obtained the requisite regulatory approvals from the Foreign Investment Review Board of Australia and the Monetary Authority of Singapore, while no approval is required from IMDA.

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"Even if a competing offeror is able to obtain the requisite approvals, it would take some time."

Moreover, Keppel has waived its right to walk away under the offer's material adverse clause. This eliminates the risk of the offeror walking away should SPH's financial condition worsen.

The clause remains in place for the Cuscaden deal for now and its waiver will only take effect from the date its scheme document is despatched.

"The sooner the scheme is approved the better it is for SPH, so as to reduce any further uncertainty and instability for its various stakeholders and preserve value," Keppel said.

On top of having a shorter time to pay out, Keppel Reit and SPH Reit units that SPH shareholders will receive in mid-January 2022 will come with accrued distributions, Keppel said.

Normally, Keppel Reit unitholders will be entitled to their second-half distributions in early-February 2022, while SPH unitholders will be entitled to their first-quarter distributions in mid-January 2022.

This means if the deal is completed, SPH shareholders will get future cash distributions from SPH Reit and Keppel Reit, in addition to receiving Keppel Reit units at a 10 per cent discount to its net asset value as at Sep 30.

"We believe that Keppel's final offer is a compelling one and a win-win proposition which would be put to both Keppel Corporation's and SPH's shareholders for their respective decisions," it noted.

For Keppel shareholders, the group maintained that the deal with SPH is an opportunity to acquire a quality platform that is "strongly aligned and complementary" to the Keppel group's business model and capabilities. Keppel is also uniquely placed to grow and unlock value from SPH's portfolio by harnessing both groups' synergies.

That being said, Keppel said it will continue to maintain price discipline, and will not go beyond the proposed acquisition's intrinsic value to Keppel.

Shares of Keppel closed 0.4 per cent or S$0.02 higher at S$5.31 on Monday (Nov 15), while Keppel Reit closed 0.9 per cent or S$0.01 higher at S$1.16.

SPH, which publishes The Business Times, and SPH Reit separately called for trading halts on Monday. SPH shares closed 0.9 per cent or S$0.02 higher at S$2.33 on Friday (Nov 12), while SPH Reit closed 1 per cent or S$0.01 higher at S$1.02.

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