UPDATE: Temasek’s Mapletree Investments forms consortium to bid against Temasek-tied Keppel for Temasek-linked SPH

A Singapore 10-dollar note Photo by Leslie Shaffer

This item was originally published on Friday, 29 October 2021 at 12:05 p.m. SGT; it has since been updated to include more details.

Mapletree Investments, which is wholly owned by Singapore state-owned investment company Temasek Holdings, has formed a consortium to bid against Keppel Corp., which counts Temasek as its largest shareholder, for SPH, which is also tied to Temasek.

The consortium’s offer only slightly pips Keppel’s bid, leading to speculation a bidding war might emerge, although that would look like a Temasek vs. Temasek bout with a Temasek-tied prize.

The new bid for SPH is for S$2.10 a share in cash, the consortium said in a filing to SGX Friday. The consortium said its bid would not be reduced to adjust for SPH’s final dividend of S$0.03 a share for the financial year ended 31 August 2021.

That compares with Keppel’s bid of S$0.668 in cash and 0.596 Keppel share. As part of Keppel’s offer, SPH would also distribute 45 percent of SPH REIT to shareholders, or 0.782 SPH REIT for every SPH share held. In August, when the Keppel bid was made, that translated to an implied value of S$2.099 for every SPH share. Keppel’s bid was valued at S$2.2 billion.

The consortium bidding against Keppel, called Cuscaden Peak, includes Tiga Stars, a wholly owned subsidiary of tycoon Ong Beng Seng’s Hotel Properties, and Adenium, which is a wholly owned subsidiary of Temasek portfolio company CLA Real Estate Holdings, as well as Mapletree Investments‘ indirect wholly owned subsidiary Mapletree Fortress, the consortium said.

If successful, the competing bid would also result in Cuscaden Peak incurring an obligation to offer for all of SPH REIT’s units.

Cuscaden Peak said its offer was contingent on SPH completing the restructuring of its media business, which includes hiving off the news business into a non-profit, and approval by three-fourths by value of SPH’s shareholders. In addition, Cuscaden Peak said the offer was also contingent on regulatory approvals.

The consortium noted SPH has not entered into any binding agreement with Cuscaden Peak.

Who owns Cuscaden Peak

Cuscaden Peak is 40 percent owned by Tiga Stars, 30 percent by Adenium and 30 percent by Mapletree Fortress, the filing said.

Tiga Stars is 70 percent owned by Hotel Properties, with the remainder held by Como Holdings, which is ultimately owned by Ong Beng Seng, who is the controlling shareholder of Singapore-listed Hotel Properties. Hotel Properties said it has agreed to commit S$210 million to Tiga Stars, funded by a combination of loan financing and internal resources.

Adenium is wholly owned by CLA Real Estate Holdings, which is an independently managed portfolio company of Temasek. CLA Real Estate Holdings has a portfolio including all of real estate group CapitaLand Ltd., real estate assets in Australia and life science sector investments, the filing said. CapitaLand Ltd. holds the majority of Singapore-listed CapitaLand Investment.

Temasek stake in Keppel

Temasek owns 20.99 percent of Keppel as of 9 July, making it the largest single shareholder, according to SGX data.

According to SPH’s 2020 annual report, SPH held 20 percent of KBS US Prime Property Management, in which Keppel holds an indirect 30 percent stake, and 20 percent of Konnectivity, which is a joint venture with Keppel. That report also showed DBS Bank held 9.5 percent of SPH; DBS is 29.4 percent owned by Temasek as of February 2021, according to SGX data. Fullerton Pvt. Ltd., which is ultimately held by Temasek, held 4.02 percent of SPH, according to the SPH 2020 annual report.

The bid for SPH is not the first time Ong Beng Seng has done business with Temasek. In 2003, he tied up with Temasek to take over NatSteel. In 2015, Ong’s Hotel Properties and Temasek tied up to buy a then-billion-pound luxury residential development near the Tate Modern gallery in London.

SPH REIT has a portfolio of five assets across Singapore and Australia. In Singapore, the REIT owns the Paragon mall, The Clementi Mall and The Rail Mall. In Australia, the REIT owns a 50 percent interest in Westfield Marion Shopping Centre in Adelaide, South Australia, and an 85 percent stake in Figtree Grove Shopping Centre in Wollongong, New South Wales.

As of end-March, Mapletree Investments owned and managed S$66.3 billion of properties in the data center, industrial, lodging, logistics, mixed-use, multifamily, office, residential and retail sectors. Mapletree Investments is wholly owned by Singapore state-owned investment company Temasek Holdings.