Keppel Corp. proposed taking 79 percent owned Keppel Telecommunications & Transportation private at S$1.91 a share, it said in a filing to SGX on Thursday.
The stock last traded at S$1.36 on Friday of last week before being halted, indicating a 40 percent premium in the offer price.
The maximum aggregate consideration for all of the shares would be S$226.62 million, compared with the book value of S$181.99 million, according to first half results, it said. To fund the deal, Keppel will use an existing DBS credit facility, it said.
The rationale is to simplify Keppel’s corporate structure and allow it to better support Keppel T&T as it expands its data center and urban logistics business, it said, pointing to the relatively low public float of the stock.
If the offer is successful, Keppel T&T will become a wholly owned subsidiary of Keppel and is expected to be delisted from the Singapore Exchange, it said.
Loh Chin Hua, CEO of Keppel Corp., added in the press release the offer would also allow Keppel T&T’s minority shareholders who are concerned about M1’s prospects amid heightened competition to make a “clean cash exit” with a “substantial premium.”
Keppel T&T owns 19.2 percent of M1; Keppel and Singapore Press Holdings on Thursday also announced plans to make an offer for all of M1 at S$2.06 a share via a special purpose vehicle, with a view to potentially delisting the telco.
The offer for Keppel T&T will require the approval of more than 50 percent of shareholders representing at least 75 percent of the value of Keppel T&T shares held by shareholders voting, it said. Keppel will abstain from voting, it said.
The deal will also require approval from the High Court of Singapore, it said.
The offer could be completed within 22 weeks, Keppel said.
DBS Bank acted as financial adviser to Keppel on the deal, it said.
This article was originally published on Thursday 27 September 2018 at 9:22 A.M. SGT; it has since been updated.