SINGAPORE - Singapore Press Holdings (SPH), together with Keppel Corp, will be making a pre-conditional voluntary general offer of $2.06 per share for the remaining M1 shares they do not own, valuing Singapore's third-largest mobile operator at $1.9 billion.
The offer is a strategic initiative to gain majority control of M1, in order to drive business changes in M1 that will enable it to compete more effectively in the telecommunications industry, said SPH in a statement on Thursday morning (Sept 27).
SPH chief executive officer Ng Yat Chung said: "We are supporting Keppel in this offer, as we see the potential for long-term value creation in M1 from the growth and business transformation initiatives to be undertaken post close of the offer."
He added that the transaction is earnings accretive - that is, increases earnings per share - for SPH shareholders; and is part of SPH's ongoing strategy to enhance value for its shareholders.
Mr Ng said: "Keppel Corp has demonstrated strong commitment to lead M1 in its transformation plans, and we believe they are the right partner to take M1 further. We also see opportunities for SPH to leverage on M1's mobile platform to offer on demand and ready digital content to better serve our customers. We look forward to working together to utilise our resources and expertise to best develop M1."
The offer will be made through a joint venture company, Konnectivity Pte Ltd, which is majority owned by Keppel.
SPH, which owns 13.45 per cent of M1, will inject its entire stake into Konnectivity. It is envisaged that the media and property group will invest up to $51.3 million to partially fund the offer.
Depending on the level of acceptances, SPH's eventual shareholding in Konnectivity will range from a minimum of 20 per cent to a maximum of 43.84 per cent. Upon the close of the offer, SPH's effective stake in M1 may increase to up to 16.13 per cent.
The offer price is about a 36 per cent premium over the lowest closing price of $1.520 over the 52-week period preceding the last trading date, and about a 25 per cent premium over the average target price per share of $1.644 by equity research analysts covering M1.
Trading in Keppel Telecommunications & Transportation (Keppel T&T) and M1 shares has been halted since Monday. On Wednesday, Keppel closed at $7.16 a share, up three cents from Tuesday's close, while SPH ended at $2.79 a share, down four cents.