Shareholders concerned that SPH still undervalued, says Sias

SINGAPORE Press Holdings' (SPH) shareholders have voiced concerns that current offers on the table still undervalue the company, the Securities Investors Association (Singapore) (Sias) said in a statement on Tuesday (Nov 2).

This comes following a surprise all-cash offer from consortium vehicle Cuscaden Peak on Friday (Oct 29) to take SPH private.

The consortium comprising Hotel Properties, businessman Ong Beng Seng, and two Temasek-linked entities, CLA and Mapletree, had proposed to acquire SPH at S$2.10 per share in cash.

Some shareholders have approached Sias to express concerns that the offers are currently below net asset value (NAV); they also question whether SPH T39 should "carry on its business on its own", given that the media business has been hived off.

SPH had a NAV of S$2.26 per share as at end-August this year before the media restructuring was completed. After taking into account the media restructuring cost, the NAV per share as at Aug 31, 2021 was S$2.18 and the dividend-adjusted NAV is S$2.15.

SPH's NAV took a hit in FY2020 due to a reduction in valuation of its investment properties as a result of the Covid-19 pandemic. Investment properties incurred a fair-value loss of S$232 million in FY2020, largely from a reduction in the valuation of retail malls and student accommodation.

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Shareholders also said that SPH should be "valued accordingly" as it is now a property holding company, Sias said.

"SPH is a prized entity, they feel, and the board should do its utmost to ensure that there are, in fact, no other potential bidders," it added.

Sias intends to meet with the senior management of SPH at an appropriate time to discuss the concerns of shareholders. It would subsequently hold dialogues to help shareholders better understand the offer chosen by the board and for them to make an informed decision.

Sias said it believes that the board will consider the offers and decide on what is in the best interest of its stakeholders. The board will also need to evaluate the offers and advise its shareholders on the merits.

SPH already has an offer on the table from Keppel, at a slightly lower price of S$2.099 per share. This offer comprises cash of S$0.668 per share, 0.596 Keppel Reit unit (valued at S$0.715) and 0.782 SPH Reit unit (valued at S$0.716) per share.

Keppel has an opportunity, within 10 business days of Cuscaden's offer, or up until Nov 15, to respond with an "improved proposal", SPH said in an Oct 29 announcement.

Shares of SPH ended Tuesday at S$2.13, up S$0.01 or 0.5 per cent; SPH Reit closed at S$1.03, down S$0.01 or 1 per cent.