SPH gets court go-ahead for Cuscaden Peak vote, narrowing Keppel’s options

Photo by Alireza Mahmoudi on UnsplashPhoto by Alireza Mahmoudi on Unsplash

Keppel Corp. faces narrowing options for its SPH bid to succeed against rival Cuscaden Peak’s, which was made at the eleventh hour.

SPH said Monday it received the go-ahead from the Singapore court to convene a meeting for its shareholders to vote on the takeover bid from consortium Cuscaden Peak. 

In the same announcement filed to SGX, SPH said the court had granted the company leave to withdraw its application to convene a meeting for its shareholders to vote on Keppel’s bid. 

Keppel’s option to win SPH may hinge solely on its notice of arbitration filed with the Singapore International Arbitration Centre (SIAC) to commence proceedings against SPH, a move the company announced last week. 

SPH said, however, that when it came to the arbitration, “the company will vigorously defend its position.”

Last week, SPH said it had moved to terminate consideration of Keppel’s takeover bid. 

“The termination of the Keppel scheme is consistent with the preliminary recommendation of the directors of the company who are considered to be independent,” SPH said last week. “In view that the implied value of the Cuscaden scheme consideration remains superior to that of the Keppel scheme consideration, the independent directors continue to maintain their preliminary recommendation.”

At the time, Keppel said it did not agree with the attempted termination, and that it believed SPH was obliged to continue with the Keppel bid.

Cuscaden’s bid

Cuscaden Peak’s bid — which values SPH at around 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, based on unit prices at the time the offer was made.  

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.

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.