Keppel says offer for SPH irrevocable, provides shortest time to payout

SPH shareholders will have to vote on Keppel’s offer by Dec 8. PHOTOS: KUA CHEE SIONG/GIN TAY

SINGAPORE - Keppel Corporation reiterated in a media statement on Tuesday (Nov 16) that its offer for Singapore Press Holdings (SPH) is firm and irrevocable.

It also provides the shortest time to payout - by mid-January next year - for shareholders, Keppel added.

Its remarks come a day after Cuscaden Peak raised its offer for SPH to up to $2.40 a share. Keppel had also raised its bid to up to $2.351 a share days before.

Keppel said its final consideration of $2.351 per SPH share as at Nov 9 represents a compelling 57 per cent premium to SPH's undisturbed trading price on March 30. The final consideration will depend on the unit prices of Keppel Reit and SPH Reit.

Keppel has also waived its right to walk away under the offer's material adverse clause. This eliminates the risk of the offeror walking away should SPH's financial condition worsen.

The clause remains in place for the Cuscaden deal for now. Its waiver will take effect only from the date its scheme document is dispatched.

The Cuscaden consortium comprises Hotel Properties (HPL), businessman Ong Beng Seng and two Temasek-linked entities - CLA and Mapletree.

It is now offering each SPH shareholder the option of an all-cash offer of $2.36, or $2.40 per share, comprising $1.602 in cash and 0.782 of an SPH real estate investment trust (Reit) unit, valued at 79.8 cents apiece.

The Cuscaden scheme is expected to be completed by February next year, but its scheme meeting can proceed only if SPH shareholders vote against Keppel's offer at its scheme meeting, to be held by Dec 8.

HPL group executive director Christopher Lim, who addressed the media as a representative of Cuscaden, said: "SPH has acknowledged that the Cuscaden scheme is superior to the Keppel scheme. SPH independent directors have made a preliminary recommendation for SPH shareholders to vote against the Keppel scheme and to vote in favour of the Cuscaden scheme.

"But I just want to point out that... the two meetings are to be held on different dates... And it is our view that this could be very confusing to shareholders."

He added that if the majority of SPH shareholders do not attend the Keppel scheme meeting and cast their vote, then even a minority of shareholders can get the scheme approved, meaning that the Cuscaden one will not have a chance of being heard.

"The bigger issue to me is that shareholders may not understand how things work because there are about 60,000 shareholders for SPH and they're all largely retail shareholders. Not all of them are able to comprehend such complicated schemes," he said.

When asked whether Cuscaden's price is final, Mr Lim said: "Unlike Keppel, we have not said that ours is the final offer. So I will leave it as that. Our offer is not subject to that restriction of not being capable of being revised upwards. I'm not saying we will, but I'm saying that is our position."

Mr Lim added that all necessary regulatory applications have been submitted and are being processed. "Cuscaden is confident that these will not impact the transaction timeline."

Keppel had said that it has obtained the needed regulatory approvals from the Foreign Investment Review Board of Australia and the Monetary Authority of Singapore, and that no approval is required from the Infocomm Media Development Authority.

So, even if a competing offeror is able to obtain the requisite approvals, that would take some time, Keppel said.

"The sooner the scheme is approved, the better it is for SPH, so as to reduce any further uncertainty and instability for its various stakeholders and preserve value."

Keppel added that it believes its final offer is a compelling one and a win-win proposition that would be put to both Keppel Corporation's and SPH's shareholders for their respective decisions.

SPH shares closed at $2.37 on Tuesday, while SPH Reit closed at $1.02.

Meanwhile, Keppel shares closed at $5.31, with Keppel Reit at $1.18.

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