Keppel Corporation has improved its takeover offer of Singapore Press Holdings to $2.351 per share – up 12.6% from its original offer of $2.099.

Keppel’s widely expected revised offer is forced upon to counter a possible offer of $2.10 offer from a consortium called Cuscaden Peak led by hotelier Ong Beng Seng on Oct 29.

Back in August, Keppel tabled an offer worth $2.099 with a mix of cash and Keppel REIT and SPH REIT units. 

Investors have been expecting a more compelling offer, with SPH shares closing at $2.16 on Nov 9 – ahead of Keppel’s announcement at 11.56 pm.

Most significantly, Keppel’s revised offer will now consist of a cash component of 86.8 cents per share, up from 66.8 cents per share. 

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The number of Keppel REIT units that forms the offer remains at 0.596 per SPH share. 

However, given how the price of Keppel REIT has dropped since the original offer was tabled, the Keppel REIT component under the revised offer is now worth 68.5 cents, versus 71.5 cents earlier.

On the other hand, the number of SPH REIT units entitled for each accepted SPH share remains at 0.782. But, the value has increased from 71.6 cents to 79.8 cents instead.

Cuscaden Peak’s offer, if formally tabled, will be all-cash.

Keppel considers this revised offer “final” and “irrevocable”.

"SPH acknowledges that Keppel’s final offer is superior to the competing offer from Cuscaden Peak and will undertake to call for the SPH scheme
meeting," states Keppel.

Assuming both its own and SPH’s shareholders give their go-ahead, SPH shareholders can expect to receive their payment by mid Jan next year.

“An earlier resolution is beneficial not just to SPH shareholders, but also to SPH, as prolonged uncertainty and instability would affect staff morale and would not be conducive to SPH’s business or to preserving value,” says Keppel in its announcement.

Keppel also maintains that the bid makes strategic sense for itself and SPH, given how Keppel is “uniquely positioned” to enhance and unlock the portfolio of mainly property assets.

Loh Chin Hua, CEO of Keppel says that even with the additional cash consideration of 20 cents per share, the company continues to see value in the SPH portfolio. 

“The additional impact on our net gearing is marginal, and we would retain the capacity to pursue Vision 2030 growth opportunities in areas such as renewables and decarbonisation solutions, as well as reward shareholders,” he adds.

However, Loh adds that the company will remain “disciplined” and not acquire SPH at any cost, stressing that this is the “final consideration”.

“We are keen to hold the scheme meeting as soon as possible, so as to reduce any further uncertainty and instability, which would not be conducive to SPH’s business,” he says. 

“If the transaction is completed, SPH shareholders can receive their consideration by mid January 2022. We hope that both Keppel and SPH shareholders would consider this win-win offer favourably,” says Loh.