The value of Keppel Corp’s offer for the acquisition of Singapore Press Holdings is likely to continue to fluctuate with market volatility, rising risk-free rates in the form of 10-year government bond yields from which REITs’ yield spreads are priced, and the impact of new Covid variants.

At any rate, Keppel’s EGM for its shareholders to vote on its cash+REIT offer for SPH is on Dec 9 and the likelihood for all resolutions passing are very high as Keppel’s payment per SPH share is largely in REITs, with 36.9% in cash, based on the valuations of Keppel’s improved offer on Nov 9.

On Nov 16, the day after Cuscaden Peak - a joint venture comprising Hotel Properties, Mapletree and CLA Real Estate Holdings - raised its cash offer for SPH to $2.36 per share, Keppel’s offer which had been priced at $2.351 on Nov 10, rose to $2.37. This was one cent higher than Cuscaden’s all cash offer of $2.36 for each SPH share. The reason for Keppel’s seemingly higher valuation per SPH share was - perversely - because investors believed that SPH’s shareholders would vote based on indications from its independent directors, which viewed Cuscaden’s cash offer as superior.

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