SINGAPORE – With the bidding war for Singapore Press Holdings heating up after Keppel Corp raised its offer to $2.351 a share, SPH chief executive Ng Yat Chung said on Wednesday (Nov 10) that “the door has not closed for SPH to consider a superior offer”.
The revised offer of $2.351 a share represents a 12 per cent improvement over Keppel’s original offer of $2.099 a share, and tops a rival bid from Cuscaden Peak, a consortium comprising Hotel Properties and its managing director Ong Beng Seng and two Temasek-linked entities – CLA Real Estate and Mapletree Investments.
Keppel said its revised offer, which is final and will not be increased, includes additional cash of 20 cents per share. And while under the revised offer the number of Keppel Reit and SPH Reit units remain the same, their cumulative value has increased by 5.2 cents a share with improving market conditions.
Its initial offer made in July comprised cash of 66.8 cents per SPH share,as well as 0.596 Keppel Reit unit (valued at 71.5 cents) and 0.782 SPH Reit unit (valued at 71.6 cents) per share.
Cuscaden Peak has offered to privatise SPH at $2.10 per share in cash. Its proposal which is via a scheme of arrangement still needs to be accepted by the board of SPH, which publishes The Straits Times.
Subject to the scheme’s terms being finalised, the completion of Cuscaden’s cash offer would require it to undertake a chain offer for all SPH Reit units as well. On Nov 1, Cuscaden clarified that the minimum chain offer price which it will have to offer for each SPH Reit unit is 96.4 cents in cash.
On Wednesday, SPH said that Keppel’s final offer is superior to the competing offer from Cuscaden Peak and will undertake to call for an SPH scheme meeting by Dec 8.
At a media briefing, Mr Ng said: “The factors we considered is price, structure of deal, regulatory requirements and certainty of financing. All things being equal, (Cuscaden’s) all-cash offer with a chain offer is a much better structure than the current Keppel offer. But we still have to look at what the price is and what the regulatory requirements are, and Keppel has cleared everything.
“But the door has not closed for us to consider a superior offer, we have been discussing actively with Cuscaden since Oct 28, with a view to helping them provide a revised improved offer and we are working on a draft implementation agreement,” he added.
Under the terms of the Keppel offer, SPH is permitted to enter into another agreement with any other party (including Cuscaden) by Nov 16, and a competing general offer must be announced by Dec 1.
In the event that Cuscaden or any other party provides a superior proposal to Keppel’s, SPH will proceed with holding its EGM and scheme meeting by Dec 8, and will provide a recommendation to SPH shareholders accordingly.
Should a competing superior offer be announced before Nov 16, SPH is entitled to hold the scheme meeting on, or adjourn the meeting to, a date no later than 21 days after such an announcement is made. This is to allow SPH and its independent financial adviser sufficient time to consider any such competing offer in its recommendation to shareholders, SPH said.
“Our job is to make available the best offer on the table to shareholders… The window for improved offers to come is still open, even as we try to convene the scheme meeting for Keppel’s offer by early December,” said Mr Ng, who added that SPH has engaged with more than 20 parties to date.
“If Cuscaden or any other party concludes with us an alternative implementation agreement for a scheme that is superior to Keppel’s final offer, depending on the independent financial adviser (IFA)’s opinion, and if the IFA believes the alternative proposal is better value, the board will act on the recommendation.
“SPH is not obliged to recommend Keppel’s final offer to shareholders for the scheme meeting if SPH receives a better offer, and if the IFA feels that there is a better alternative offer,” Mr Ng added.
Keppel group chief executive Loh Chin Hua told reporters and analysts on Wednesday: “We have improved our final offer not because of the competing bid.”
Since Keppel’s initial offer in July, “economic conditions have improved and we saw improvement in SPH’s financial performance”, he said. “And through the interaction with the SPH management team over the past few months, it has been made a lot clearer to us the synergies we hope to derive. So we improved the offer to make it more compelling for SPH. I truly believe this is a win-win.”
On why the offer is compelling for SPH shareholders, Mr Loh said: “It’s not just about the pricing, which is compelling. Our proposal has the most deal certainty for SPH shareholders, and is the fastest to get the transaction completed and the consideration paid to SPH shareholders as early as mid-January 2022.
Said Mr Loh: “For Keppel shareholders, this remains very attractive and is also a strategic acquisition for Keppel. The additional consideration (of 20 cents a share) is well supported by the improvement in values since July. We believe this is a portfolio we can add a lot of value to through synergies, and we are in a unique position to realise these synergies.
“This deal will have limited impact on our balance sheet and we can derive good financial returns from this transaction.”