Keppel makes privatisation offer for SPH in deal worth $3.4b

Offer selected from more than 20 potential bidders over a two-stage process

Conglomerate Keppel Corporation yesterday offered to acquire Singapore Press Holdings (SPH) after its media business is hived off, in a deal that values SPH at $3.4 billion.

The privatisation offer will see SPH delisted from the Singapore Exchange and become a wholly owned subsidiary of Keppel, whose share of the deal stands at $2.2 billion.

It marks the culmination of a strategic review by SPH that began earlier this year to restructure the loss-making media business and unlock the value of its remaining assets.

Under the offer, SPH shareholders will receive $0.668 in cash, as well as 0.596 Keppel Reit units and 0.782 SPH Reit units per share.

This makes up a total consideration of $2.099 per share, which represents an 11.6 per cent premium to last Friday's closing price of $1.88.

The offer price is also equivalent to the net asset value per share without the media business.

A trading halt was called by SPH, SPH Reit, Keppel Corp and Keppel Reit yesterday morning before the stock market opened.

SPH publishes newspapers in Singapore's four official languages, including The Straits Times and Lianhe Zaobao.

Speaking at a briefing, SPH chief executive Ng Yat Chung noted that the offer price also represents a premium of about 40 per cent, based on the last trading price before the announcement of the strategic review on March 30.

More than 20 potential bidders took part in the process, with Keppel coming out on top.

"We evaluated all the offers... based on price, the terms and conditions, the certainty of financing, regulatory approval required and the proposed structure," said Mr Ng, adding that the offer from Keppel is superior across all the fields.

"This is the best offer that we have discovered through the competitive process," he added.

Keppel's chief executive Loh Chin Hua said the proposed acquisition is very much in line with the company's vision to grow its business as a provider of solutions for sustainable urbanisation.

This is a "rare opportunity" to acquire SPH's non-media portfolio, he said, noting that the two companies are already partners in businesses such as telco M1 and a data centre in Genting Lane.

"The acquisition would allow us to reap further synergies between Keppel and SPH, and also allow Keppel to enter the fast-growing PBSA (purpose-built student accommodation) sector and accelerate our expansion in senior living," Mr Loh added.

SPH has more than 7,700 beds across Britain and Germany under its PBSA segment, and owns aged care facilities in Singapore and Japan.

The privatisation bid can go ahead only if the restructuring of SPH's media business is completed, shareholders of both SPH and Keppel give the green light, and regulatory approval is obtained.

If these stay on track, the transaction is expected to be wrapped up by December this year.