Keppel, SPH to make S$2.06 per share offer for rest of M1

KEPPEL Corp, together with Singapore Press Holdings (SPH), will be making a pre-conditional voluntary general offer of S$2.06 per share for the remaining M1 shares they do not own, valuing Singapore's third largest mobile operator at S$1.9 billion. 

The purchase offer will be made through joint venture company, Konnectivity Pte Ltd, which is majority owned by Keppel.

SPH, which owns 13.45 per cent of M1, will inject its entire 124.45 million M1 shares into Konnectivity. It is envisaged that the media and property group will invest up to S$51.3 million.

Depending on the level of acceptance, SPH's eventual shareholding in Konnectivity will range from a minimum of 20 per cent to a maximum of 43.84 per cent. Its effective interest in M1 will range from 13.45 per cent and 16.13 per cent.   

The offer price represents a 36 per cent premium over the lowest closing price of S$1.520 over the 52-week period preceding the last trading date and about a 25 per cent premium over the average target price per share of S$1.644, according to equity research analysts covering M1. 

SPH chief executive officer Ng Yat Chung said: "We are supporting Keppel in this offer as we see the potential for long term value creation in M1 from the growth and business transformation initiatives to be undertaken post close of the offer. The transaction is earnings accretive for SPH shareholders, and is part of SPH's ongoing strategy to enhance value for its shareholders.

"Keppel has demonstrated strong commitment to lead M1 in its transformation plans, and we believe they are the right partner to take M1 further. We also see opportunities for SPH to leverage on M1's mobile platform to offer on demand and ready digital content to better serve our customers. We look forward to working together to utilise our resources and expertise to best develop M1."

Approval from the Info-communications Media Development Authority is a precondition to making the offer.

Trading in Keppel T&T and M1 shares has been halted since Monday. On Wednesday, Keppel closed at S$7.16 a share, up three Singapore cents, or 0.4 per cent, from Tuesday's close, while SPH ended at S$2.79 a share, down four Singapore cents, or 1.4 per cent.

Credit Suisse (Singapore) is the sole financial adviser to SPH, which owns The Business Times.