SPH shareholders to receive $2.099 per share following acquisition by Keppel

Keppel Corp has proposed the acquisition of SPH, minus its media assets, for $2.2b.

Singapore Press Holdings (SPH), which had recently divested of all its media properties, has announced what each shareholder would receive following Keppel’s proposed acquisition of the company.

In a bourse disclosure, SPH said each of its shareholders will receive a total of $2.099 per share, comprised of $0.668 cash per share, 0.596 Keppel REIT units valued at $0.715 per share, and 0.782 SPH REIT units valued at $0.716 per share from a distribution in-specie by SPH.

The scheme posts a 39.9% premium on the last trade price of SPH shares at $1.5 per unit before the strategic review of SPH’s businesses was announced end-March. This is also an 11.6% premium on the last share price of $1.88 per unit as of end July.

“The outcome is the result of a strategic review process that has taken place over many months. We took the first step with Media Restructuring to ensure a sustainable future for the media business, while removing its losses from SPH. The next step was a thorough process to unlock and maximise value for all shareholders for the remaining company. With the privatisation offer from Keppel, shareholders now have an opportunity to realise the value of their SPH shares at a premium of 39.9% to the last traded price before the Strategic Review was announced,” said SPH CEO Ng Yat Chung.

Keppel CEO Loh Chin Hua said the offer is a good deal for both companies.

“I think it is win-win, as I mentioned. It is a very unique and rare opportunity, an attractive opportunity for Keppel. But it is also a very good opportunity, we believe, for SPH unitholders to realise their investment, post the media demerger or spin-off,” he said in a media briefing Monday.

OCBC Investment Research likewise said that it is a fair deal.

“In our view, the deal looks fair in both unlocking value for SPH shareholders and avoiding a situation where prime assets may be cherry-picked, while the receipt of SPHREIT and KREIT units will allow shareholders to still participate in the recovery prospects of the retail and commercial real estate segments at attractive dividend yields (historical average yields ~4% range),” it said in a report.

In a separate report, OCBC said Keppel Corp could monetize over $3b to $5b of SPH’s assets, carrying a total value of $17.5b, over the next three years.