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Keppel deal a game changer but SPH shareholders should understand what is at stake: Sias
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What is at stake for investors is not just a question of price, said Sias president David Gerald.
PHOTO: LIANHE ZAOBAO
SINGAPORE - Shareholders of Singapore Press Holdings (SPH) should understand what is at stake before deciding on a new offer by Keppel Corporation to take the company private, said Mr David Gerald, president of Securities Investors Association Singapore (Sias).
He said in a press statement on Thursday (Nov 11): "Keppel's significantly improved and attractive final offer for SPH this week is a game changer, although the Cuscaden Peak cash offer will remain attractive to those who cannot wait for long-term gains and only want all in cash."
Keppel's final offer of $2.351 per share for SPH, which includes an additional 20 cents in cash, is 12 per cent higher than its initial offer on Aug 2, and 57 per cent higher than SPH's unaffected price on March 30.
It is raising the cash component of its offer to 86.8 cents per share.
The number of Keppel Reit and SPH Reit units remain the same.
Cuscaden Peak, which is a consortium comprising tycoon Ong Beng Seng and Temasek-linked entities CLA Real Estate Holdings and Mapletree, is offering to take SPH private for $2.10 per share, fully in cash.
But what is at stake for investors is not just a question of price, Mr Gerald said.
An important point SPH shareholders may consider favourably is the deal certainty that Keppel offers at the moment, in the absence of any other superior offer, he said.
Keppel's revised offer is irrevocable and it has waived the material adverse effect clause, eliminating the risk of the offeror walking away should SPH's financial condition take a turn for the worse.
Keppel has also secured the requisite approvals from the Monetary Authority of Singapore and Australia's Foreign Investment Review Board, as SPH Reit owns malls in Australia.
In contrast, competing offerors including Cuscaden would need to seek these approvals, which could take some time.
Another "pleasing" aspect of Keppel's offer is that it also provides a quick payout for SPH shareholders, who could receive their cash and real estate investment trust (Reit) units by mid-January 2022, Mr Gerald said.
He added: "It must be recognised that there are also benefits in Keppel's transparent bid structure, which effectively gives SPH shareholders a large 45 per cent tradable stake in SPH Reit, and passes on any future upside benefits to SPH shareholders."
He said in a press statement on Thursday (Nov 11): "Keppel's significantly improved and attractive final offer for SPH this week is a game changer, although the Cuscaden Peak cash offer will remain attractive to those who cannot wait for long-term gains and only want all in cash."
Keppel's final offer of $2.351 per share for SPH, which includes an additional 20 cents in cash, is 12 per cent higher than its initial offer on Aug 2, and 57 per cent higher than SPH's unaffected price on March 30.
It is raising the cash component of its offer to 86.8 cents per share.
The number of Keppel Reit and SPH Reit units remain the same.
Cuscaden Peak, which is a consortium comprising tycoon Ong Beng Seng and Temasek-linked entities CLA Real Estate Holdings and Mapletree, is offering to take SPH private for $2.10 per share, fully in cash.
But what is at stake for investors is not just a question of price, Mr Gerald said.
An important point SPH shareholders may consider favourably is the deal certainty that Keppel offers at the moment, in the absence of any other superior offer, he said.
Keppel's revised offer is irrevocable and it has waived the material adverse effect clause, eliminating the risk of the offeror walking away should SPH's financial condition take a turn for the worse.
Keppel has also secured the requisite approvals from the Monetary Authority of Singapore and Australia's Foreign Investment Review Board, as SPH Reit owns malls in Australia.
In contrast, competing offerors including Cuscaden would need to seek these approvals, which could take some time.
Another "pleasing" aspect of Keppel's offer is that it also provides a quick payout for SPH shareholders, who could receive their cash and real estate investment trust (Reit) units by mid-January 2022, Mr Gerald said.
He added: "It must be recognised that there are also benefits in Keppel's transparent bid structure, which effectively gives SPH shareholders a large 45 per cent tradable stake in SPH Reit, and passes on any future upside benefits to SPH shareholders."
SPH has announced that it is required to hold its extraordinary general meeting and scheme meeting for shareholders to decide on Keppel's scheme by Dec 8, even if Cuscaden or any other party provides a revised and superior proposal.
Keppel's scheme will first be put to a vote by SPH's shareholders, who would have to decide if they prefer "an attractive bird in hand, or wait for an outcome some time later", said Mr Gerald.
In the meantime, SPH shareholders must recognise that continued uncertainty and delay could weigh on staff morale and potentially affect the performance and value of SPH if things are allowed to drag on, he added.
Mr Gerald said Sias will hold separate dialogues with the chief executives of SPH and Keppel to help shareholders of both companies have a better understanding of the offers and clear their doubts to make an informed decision.
Keppel's scheme will first be put to a vote by SPH's shareholders, who would have to decide if they prefer "an attractive bird in hand, or wait for an outcome some time later", said Mr Gerald.
In the meantime, SPH shareholders must recognise that continued uncertainty and delay could weigh on staff morale and potentially affect the performance and value of SPH if things are allowed to drag on, he added.
Mr Gerald said Sias will hold separate dialogues with the chief executives of SPH and Keppel to help shareholders of both companies have a better understanding of the offers and clear their doubts to make an informed decision.
