SINGAPORE - The shareholders of Singapore Press Holdings (SPH) now have to choose whether to accept Keppel Corp's revised offer of $2.351 a share, or the improved offer of up to $2.40 a share from the consortium led by hotelier Ong Beng Seng, which SPH said is the superior one in terms of price and value certainty.

This comes after Cuscaden Peak, a consortium comprising Mr Ong's investment vehicle and two Temasek-linked entities, sweetened its offer, valuing SPH at up to $3.9 billion, compared with Keppel's bid, which values SPH at $3.8 billion. Keppel had initially offered $2.099 a share for SPH last month, but Cuscaden Peak countered with an all-cash offer of $2.10 per share.

But following Keppel's beefed-up offer of $2.351, Cuscaden upped the ante by offering SPH shareholders the option of receiving either $2.40 per share - comprising $1.602 of cash per share and 0.782 of an SPH Reit unit valued at 79.8 cents apiece - or an all-cash offer of $2.36 per share.

But first, they have to vote on Keppel's offer by Dec 8. They can vote in favour of the Cuscaden scheme only after they have voted against Keppel's scheme.

"It isn't often that we have two competing schemes taking place one after another. We are bound by the implementation agreement with Keppel and have committed to convene the Keppel scheme meeting by Dec 8," SPH chief executive Ng Yat Chung said on Monday (Nov 15).

So what should shareholders do?

Mr Ng said: "If you like Cuscaden's proposal, you must first vote against Keppel's revised offer. And when Cuscaden's scheme meeting is convened, you must vote in favour of its scheme.

"But if you prefer Keppel's offer, then vote in favour of that at the scheme meeting. If Keppel's scheme is passed, there is no chance to vote for Cuscaden's scheme.

"If Keppel's scheme succeeds, everything will be wrapped up by January. If Cuscaden's scheme goes through, it will be wrapped up some time in February."

He added: "And if the shareholders vote down Cuscaden's scheme, SPH will stay listed."

In recommending that shareholders vote against Keppel's scheme and in favour of Cuscaden's offer, Mr Ng said: "The revised proposal of $2.40 a share is the highest offer on the table.

"A particularly attractive feature of this offer is the option to choose... Some shareholders will be interested in all cash, while others prefer exposure to SPH Reit and (earning) dividend income. This offer took on board shareholders' desire for options."

In addition, no shareholder approval is required from any of the consortium's members, and the "material adverse effect" clause is also waived by Cuscaden, which means its offer will proceed even if there is a material decline in SPH's consolidated net asset value.

Cuscaden said its offer will not be adjusted for the three cents per share dividend due to be paid to SPH shareholders; nor will it be adjusted for a $34 million break fee that would be payable to Keppel if Cuscaden succeeds.

"If shareholders vote against Keppel's scheme and if Cuscaden's scheme succeeds, then Keppel has the right to claim the break fee from SPH. But in effect, Cuscaden will be paying Keppel the fee," Mr Ng said.

Cuscaden said that it recognises that each SPH shareholder has different investment objectives.

"It has tailored its offer to provide maximum flexibility and value certainty to suit SPH shareholders' individual investment needs," the consortium said.

It added that the all-cash option has no price volatility or monetisation risk, and will also not attract brokerage fees.

"Since the initial announcement of the Keppel scheme on Aug 2, the implied market value of the Keppel scheme consideration fell to as low as $2.201 per share on Sept 20," Cuscaden added.

Securities Investors Association (Singapore) chief executive David Gerald noted that Cuscaden's all-cash offer provides SPH shareholders with "a cleaner way to monetise their investments in the company".

"Cuscaden also offers shareholders the option to receive about one-third of the consideration in the form of SPH Reit units. Depending on the final proportion of SPH shareholders electing to receive SPH Reit units, a chain offer for SPH Reit may be triggered," he said.

Mr Ng said that if Cuscaden's offer prevails, and it owns more than 30 per cent of SPH Reit, the consortium will have to undertake a chain offer for all SPH Reit units at the minimum price of 96.4 cents each in cash.

"If all the shareholders opt for cash and Reits, then Cuscaden's stake in SPH Reit will be 20 per cent. And there will be no chain offer," he added.

But if all the shareholders opt for cash, then it will have to make a chain offer for SPH Reit. This will take place only after Cuscaden's scheme becomes effective.

Most analysts concur Cuscaden's offer is the superior one.

But UOB KayHian analyst Adrian Loh said some may still view Keppel's offer as "better as it already has all the regulatory approvals in place and can complete the transaction much quicker".

"SPH shareholders have to consider whether they are willing to see Keppel walk away after Dec 8, or wait three to four months for the SPH deal to complete," he said.