SPH to join Keppel for M1 buyout offer

They are willing to invest up to $51.3m to partially fund the offer.

Singapore Press Holdings (SPH) will partner with Keppel Corporation for a pre-conditional voluntary general offer for M1 Limited through Keppel arm Konnectivity, an announcement revealed.

At a price of $2.06 per share, the offer will be for all the remaining M1 shares still not owned by Konnectivity.

“We are supporting KCL in this offer as we see the potential for long term value creation in M1 from the growth and business transformation initiatives to be undertaken post close of the offer,” SPH CEO Ng Yat Chung said. “The transaction is earnings accretive for SPH shareholders, and is part of SPH’s ongoing strategy to enhance value for its shareholders.”

Through the deal, SPH has undertaken to roll-over its existing 13.45% stake in M1 into Konnectivity and eyes to invest up to $51.3m to partially fund the offer. SPH’s effective stake in M1 may increase up to 2.68 ppt to 16.13% upon the close of the offer.

“We also see opportunities for SPH to leverage on M1's mobile platform to offer on demand and ready digital content to better serve our customers,” Ng added.

Also read: Will Keppel ditch weakening M1 as it aims to go private?

"Notwithstanding the challenges currently facing the industry, we see considerable potential in M1 and have developed a transformation plan to sharpen M1's competitiveness," Keppel Corporation CEO Loh Chin Hua said.

However, Loh acknowledged that the 'transformation' will take several years.

"The offer allows shareholders of M1 who are not prepared to wait and bear the related risks to realise their investment in M1 upfront," he explained.

The deal will be formally inked once the approval from the Info-communications Media Development Authority (IMDA) is granted.

Credit Suisse will be their sole financial adviser for the deal for SPH whilst Keppel appointed DBS as its adviser.