Keppel shareholders approve SPH acquisition by huge margin, as ball shifts to SPH’s court

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Keppel Corp.’s shareholders have overwhelmingly approved the company’s bid to take over SPH by a margin of 98.22 percent in favour, compared with 1.78 percent against the proposal at an extraordinary general meeting (EGM), according to a filing to SGX Thursday.

That shifts the takeover drama to SPH’s upcoming EGM, where the target company’s shareholders must choose between Keppel’s bid — once considered nearly a done-deal — and one from consortium Cuscaden Peak, which submitted an eleventh-hour offer to acquire SPH.

Keppel has maintained its bid still offers value to SPH’s shareholders, but it decided not to sweeten its offer a second time.

“While we believe this is an attractive acquisition, we have emphasised that Keppel will remain very disciplined and will not acquire SPH at any cost. Hence, we have made it clear that the increased consideration is final and would not be further increased,” Keppel said in responses to questions submitted shareholders prior to the EGM. The responses were filed to SGX.

SPH’s independent directors have preliminarily recommended shareholders accept Cuscaden’s bid, calling it “superior,” to Keppel’s, but SPH’s shareholders must first reject Keppel’s bid at the upcoming meeting.

Cuscaden’s bid — which values SPH at S$3.9 billion — will give shareholders the choice of either S$2.40 a share, including S$1.602 in cash and 0.782 SPH REIT unit valued at S$0.798 each, or an all-cash offer of S$2.36.

Previously, Keppel Corp. had sweetened its bid to acquire SPH to S$2.351 a share, in a cash-and-share offer, topping its previous bid of S$2.099 and a competing bid of S$2.10 in cash from Cuscaden Peak.

Keppel’s second offer had increased the cash component by S$0.20 a share, to S$0.868, as well as including 0.596 Keppel REIT unit and 0.782 SPH REIT unit.

In its responses to questions at the EGM, Keppel said it wouldn’t speculate on what it would do if its SPH bid isn’t successful.

“Suffice to say that the SPH deal is one of several exciting merger and acquisition opportunities across our Vision 2030 growth areas, including areas such as renewables and decarbonisation solutions. We will continue to explore organic and inorganic options to grow Keppel’s business,” the company said.

Who is Cuscaden Peak?

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. Mapletree Investments is wholly owned by Singapore state-owned investment company Temasek.

Cuscaden Peak is 40 percent owned by Tiga Stars, 30 percent by Adenium and 30 percent by Mapletree Fortress. 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. Adenium is wholly owned by CLA Real Estate Holdings, which is an independently managed portfolio company of Temasek.