Keppel defends final offer for SPH, says offer is 'compelling' and a 'win-win proposition'

In a bourse filing on Nov 16, Keppel reiterated that its final consideration of $2.351 per share represents a 57% premium to SPH’s “undisturbed trading price” on March 30.

The spokesperson adds that Keppel’s offer provides the shortest time to pay-out by mid-January 2022 should the deal go through.

Under Keppel’s offer, SPH will not have to hold an alternative scheme meeting within eight weeks from the date of the Keppel scheme meeting, unless Keppel’s shareholders do not approve the acquisition or the scheme at its extraordinary general meeting (EGM).

Keppel has also stressed that it has obtained the requisite regulatory approvals from the Foreign Investment Review Board of Australia and the Monetary Authority of Singapore (MAS). No approval is required from the Infocomm Media Development Authority (IMDA).

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“Even if a competing offeror is able to obtain the requisite approvals, it would take some time,” says the spokesperson.

Moreover, Keppel has waived its walk away right under the material adverse effects clause, which remains in place for the Cuscaden scheme.

The material adverse effects clause usually allows a party to walk away from a contract should there be a material change upon the signing of the contract.

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“SPH’s shareholders will get future cash distributions from SPH REIT and Keppel REIT if our deal is completed, in addition to being able to receive Keppel REIT units at a 10% discount to its net asset value (NAV) as of Sept 30,” says the spokesperson.

“The Keppel REIT units and SPH REIT units that SPH shareholders will receive in mid-January 2022 will have accrued distributions. In the usual and ordinary course of business, unitholders of Keppel REIT will be entitled to their second-half 2021 distributions in early February 2022 and unitholders of SPH REIT will be entitled to their first quarter FY2022 distributions in mid-January 2022,” it adds.

Further down the statement, Keppel says the scheme presents its shareholders with an opportunity to acquire a platform that is “strongly aligned and complementary” to the group’s business model.

“However, we will continue to maintain price discipline, and will not go beyond the proposed acquisition’s intrinsic value to Keppel. Hence, we have announced earlier that Keppel’s revised offer is final,” says the spokesperson.

Keppel’s offer will be put to its shareholders, as well as SPH’s shareholders for approval by early December.

“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,” says the spokesperson.

JP Morgan (SEA) is the sole financial adviser and WongPartnership LLP is the legal adviser for the proposed transaction and scheme.

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Shares in Keppel closed 2 cents higher or 0.38% up at $5.31 on Nov 16. Shares in SPH last traded at $2.33 before its trading halt before market open on Nov 15.

See also:

• Keppel Corp makes $2.2 bil offer to acquire SPH's non-media portfolio; SPH valued at $3.4 bil
• SPH shareholders should accept Keppel's offer as respective REITs see rally: UOB Kay Hian
• Cuscaden confirms chain offer for SPH REIT, if made, will be 96.4 cents
• With a surprise all-cash potential bid, what does Temasek-linked consortium see in SPH?
• Consortium comprising Mapletree, CLA, Ong Beng Seng and Hotel Properties make rival offer for SPH
• With potential SPH merger, analysts ask if Keppel REIT is the hunter or the hunted
• UOB Kay Hian calls SPH FY21 results 'a stark rebound', recommends investors accept Keppel's offer
• Property-focused SPH to be acquired by Keppel after hiving off media assets
• Proposed privatisation deal of SPH by Keppel Corp 'seems fair': analysts