SINGAPORE - Rigbuilder Keppel Corp is gunning to take its mainboard-listed property arm Keppel Land private amid continued weakness in the Singapore property sector.
It said in a Singapore Exchange filing on Friday that it was offering at least $4.38 per share for KepLand.
This represents a 20 per cent premium over KepLand's last traded price of $3.65.
KepCorp said in a statement that it believes this base offer price will be "fair and compelling" for KepLand shareholders.
KepCorp is KepLand's biggest shareholder, with about a 54.6 per cent stake.
To further sweeten the deal, KepCorp added that it will pay $4.60 apiece to KepLand shareholders if it gains enough acceptances for it to fully take over the company - that is, if it gets at least a 90 per cent stake by the time the offer closes.
It does not intend to revise its offer, it said.
This higher offer price values KepLand at $7.1 billion, and means that KepCorp may end up shelling out around $3.2 billion for the shares it does not already have.
KepCorp said that the move would "allow Kepcorp to further develop and achieve greater scale for the property business leveraging on the Keppel Group's financial and organizational strengths".
KepLand accounted for about 11.3 per cent of KepCorp's revenue and 21.8 per cent of its net profit for the financial year ended Dec 31 last year.