Keppel shares close 4.7% higher after M1-Simba deal falls through

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

The counter climbed 6.1 per cent or S$0.64 to an intraday high of S$11.06 just four minutes after market open, with 932,800 shares changing hands. It settled over the course of the day, ending 4.7 per cent or S$0.49 higher at S$10.91 with 6.6 million shares traded.

On Friday morning, Simba parent Tuas Ltd and Keppel announced in separate statements that the M1 deal, first announced in August 2025, had fallen through.

This was after Keppel failed to obtain relevant approvals from the Infocomm Media Development Authority (IMDA) by the extended long-stop date of May 21.

IMDA ​announced on Monday that it had halted its assessment of the proposed M1-Simba consolidation after learning that Simba was in possible breach of the Singapore’s Telecommunications Act.

Keppel shares slid as much as 5 per cent on Monday after the authority’s announcement; shares of Tuas Ltd on the Australian Securities Exchange fell more than 60 per cent.

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

Separately, on Wednesday, Keppel said that it ranked in the top 1 per cent in the industrial conglomerate 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.

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Keppel, Tuas confirm M1-Simba deal dead in the water

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”; it forecast 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. It noted that the asset manager’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 M1’s business – with a near-to-medium-term aim of a higher run rate earnings before interest, taxes, depreciation and amortisation.

Meanwhile, CGS International (CSGI) on Monday downgraded Keppel to a “hold” from its previous “add” after news of the consolidation’s delay.

It 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) assumptions to S$0.45 from S$0.48,” said CGSI analysts Lim Siew Khee and Meghana Kande.