Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>Last week, Cuscaden Peak Pte. Limited - an entity led and 40% owned by tycoon Mr. Ong Bong Seng's Singapore-listed Hotel Properties Ltd, with the remaining 60% split between the Capitaland parent company (Temasek-backed), and 30% Mapletree Investments - a S$66bn property owner-manager with four listed S-REITs and 6 PE real estate funds (also Temasek-backed) - announced a counterproposal for <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> at S$2.10/share in cash, topping the Scheme Consideration in the <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> Offer.</p>
<p>This was discussed in <em><a href="https://www.smartkarma.com/insights/sph-lobang-holders-so-shiok-bidders-so-kiasu-this-may-not-be-the-end" target="_blank" data-smartkarma-citation="insights:59725" rel="noopener">SPH Lobang - Holders So Shiok, Bidders So Kiasu. This May Not Be The End.</a></em> </p>
<p>The Cuscaden Offer was, in my mind, a teaser. The original Keppel Offer presentation said that the "value" was S$2.099/share and the market value of the Keppel Offer Consideration was S$2.086/share. This was a tenth of a cent higher than the original and less than 1% higher than the existing consideration.</p>
<p>The "problem" for Cuscaden in offering such a price was that arbitrageurs who may have had the trade on would need to buy back <a href="https://www.smartkarma.com/entities/keppel-reit" target="_blank" data-smartkarma-citation="entities:192:1" rel="noopener">Keppel REIT (KREIT SP)</a> and <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a> shares which they would have shorted to put on the arb - a good arb as discussed in <em><a href="https://www.smartkarma.com/insights/sph-shareholders-approve-spinoff-there-s-still-a-spread-to-earn" target="_blank" data-smartkarma-citation="insights:57504" rel="noopener">SPH Shareholders Approve Spinoff - There's Still a Spread To Earn</a></em> about 8 weeks ago. That would mechanically force the REIT prices higher, pushing the Keppel Scheme Consideration higher - perhaps more than 1% higher. </p>
<p>Indeed it did. On Friday while SPH was suspended, the two REITs in the Consideration Basket gained in price and the value of the Keppel Consideration rose through S$2.10/unit. Keppel also <strong><a href="https://links.sgx.com/FileOpen/KCL%20Announcement_Possible%20Offer%20for%20SPH_291021.ashx?App=Announcement&amp;FileID=688663" target="_blank" rel="noopener">announced</a></strong> it would review and respond in due course. </p>
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<p>Overnight, Cuscaden has announced the calculations for their Possible Chain Offer for <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a>. </p>

Last week, Cuscaden Peak Pte. Limited - an entity led and 40% owned by tycoon Mr. Ong Bong Seng's Singapore-listed Hotel Properties Ltd, with the remaining 60% split between the Capitaland parent company (Temasek-backed), and 30% Mapletree Investments - a S$66bn property owner-manager with four listed S-REITs and 6 PE real estate funds (also Temasek-backed) - announced a counterproposal for Singapore Press Holdings (SPH SP) at S$2.10/share in cash, topping the Scheme Consideration in the Keppel Corp (KEP SP) Offer.
This was discussed in SPH Lobang - Holders So Shiok, Bidders So Kiasu. This May Not Be The End. 
The Cuscaden Offer was, in my mind, a teaser. The original Keppel Offer presentation said that the "value" was S$2.099/share and the market value of the Keppel Offer Consideration was S$2.086/share. This was a tenth of a cent higher than the original and less than 1% higher than the existing consideration.
The "problem" for Cuscaden in offering such a price was that arbitrageurs who may have had the trade on would need to buy back Keppel REIT (KREIT SP) and SPH REIT (SPHREIT SP) shares which they would have shorted to put on the arb - a good arb as discussed in SPH Shareholders Approve Spinoff - There's Still a Spread To Earn about 8 weeks ago. That would mechanically force the REIT prices higher, pushing the Keppel Scheme Consideration higher - perhaps more than 1% higher. 
Indeed it did. On Friday while SPH was suspended, the two REITs in the Consideration Basket gained in price and the value of the Keppel Consideration rose through S$2.10/unit. Keppel also announced it would review and respond in due course. 



Overnight, Cuscaden has announced the calculations for their Possible Chain Offer for SPH REIT (SPHREIT SP). 

SPH Update: Keppel, SPH REIT Chain Offer, and Cuscaden Strategy

David Blennerhassett

Last Week in Event SPACE: Japan Post, Singapore Press, Siam Future, 51job, Kunlun, Shinsei Bank

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<p>This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.</p>
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<p>I number 46, mostly firm, deals around the region.</p>
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<p>More below the fold.</p>
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This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.


I number 46, mostly firm, deals around the region.


More below the fold.


Asia-Pac Weekly Risk Arb Summary: Singapore Press, Ausnutria, Shinsei, Golden Throat, Over The Wire

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<p>Today, <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> announced a competing privatisation offer from Cuscaden at S$2.10 cash per SPH share, which is a 40.0% premium to the share price of S$1.50 on 30 March 2021 (announcement of SPH’s strategic review), an 11.7% premium to the share price of S$1.88 on 30 July (last trading day prior to <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a>’s offer) and a 5.5% premium to the share price of S$1.99 on 28 October (last close prior to the trading halt). </p><p>As discussed in <a href="https://www.smartkarma.com/insights/sph-s-privatisation-by-keppel" target="_blank" data-smartkarma-citation="insights:55402" rel="noopener">SPH’s Privatisation by Keppel</a>, on 2 August, SPH announced a privatisation offer from Keppel. The transaction involves Keppel offering S$0.668 cash per SPH share and 0.596 Keppel REIT units per SPH share along with SPH distributing-in-specie 0.782 SPH REIT units per SPH share. Based on the last close price of <a href="https://www.smartkarma.com/entities/keppel-reit" target="_blank" data-smartkarma-citation="entities:192:1" rel="noopener">Keppel REIT (KREIT SP)</a> and <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a>, the total consideration is S$2.104 per SPH share, a whisker above Cuscaden’s all-cash offer.  </p><p>The two privatisation proposals are the culmination of the SPH’s strategic review to unlock shareholder value. The strategic review commenced with the announcement of the media business restructuring announced on 6 May. Shareholder approval for the media business restructuring was obtained on 10 September and is expected to be completed in December. </p><p>While Cuscaden’s offer is broadly similar in value to Keppel’s offer, Cuscaden’s offer may be more appealing particularly to minorities. Cuscaden’s offer has greater certainty of value as it is all cash, eliminates the risk of changing REIT unit prices (Keppel REIT and SPH REIT) and does any require further shareholders' approval on the part of Cuscaden (Keppel’s offer requires approval from Keppel shareholders). Cuscaden’s offer will also not be reduced by the S$34 million break fee payable to Keppel. </p><p>SPH responded to Cuscaden’s offer by stating that it is "<em>not a firm offer</em>" and it has "<em>not entered into any definitive or binding agreement</em>" with Cuscaden. Keppel responded to Cuscaden’s offer by stating that “<em>we are reviewing the matter and make an announcement at an appropriate time.</em>”</p><div class="content-highlight"><p>In the event of a competing offer, Keppel has a switch option to proceed with the acquisition by way of an offer in lieu of proceeding with the acquisition by way of the scheme. We previously noted that the acquisition of SPH aligns with Keppel’s Vision 2030 of improving earnings quality, increasing scale and pursuing new growth initiatives. The modest premium of both competing offers to SPH’s historical long-term multiples and share prices suggests that there is room for Keppel to bump its offer and start a bidding war. </p></div>

Today, Singapore Press Holdings (SPH SP) announced a competing privatisation offer from Cuscaden at S$2.10 cash per SPH share, which is a 40.0% premium to the share price of S$1.50 on 30 March 2021 (announcement of SPH’s strategic review), an 11.7% premium to the share price of S$1.88 on 30 July (last trading day prior to Keppel Corp (KEP SP)’s offer) and a 5.5% premium to the share price of S$1.99 on 28 October (last close prior to the trading halt). As discussed in SPH’s Privatisation by Keppel, on 2 August, SPH announced a privatisation offer from Keppel. The transaction involves Keppel offering S$0.668 cash per SPH share and 0.596 Keppel REIT units per SPH share along with SPH distributing-in-specie 0.782 SPH REIT units per SPH share. Based on the last close price of Keppel REIT (KREIT SP) and SPH REIT (SPHREIT SP), the total consideration is S$2.104 per SPH share, a whisker above Cuscaden’s all-cash offer.  The two privatisation proposals are the culmination of the SPH’s strategic review to unlock shareholder value. The strategic review commenced with the announcement of the media business restructuring announced on 6 May. Shareholder approval for the media business restructuring was obtained on 10 September and is expected to be completed in December. While Cuscaden’s offer is broadly similar in value to Keppel’s offer, Cuscaden’s offer may be more appealing particularly to minorities. Cuscaden’s offer has greater certainty of value as it is all cash, eliminates the risk of changing REIT unit prices (Keppel REIT and SPH REIT) and does any require further shareholders' approval on the part of Cuscaden (Keppel’s offer requires approval from Keppel shareholders). Cuscaden’s offer will also not be reduced by the S$34 million break fee payable to Keppel. SPH responded to Cuscaden’s offer by stating that it is "not a firm offer" and it has "not entered into any definitive or binding agreement" with Cuscaden. Keppel responded to Cuscaden’s offer by stating that “we are reviewing the matter and make an announcement at an appropriate time.”In the event of a competing offer, Keppel has a switch option to proceed with the acquisition by way of an offer in lieu of proceeding with the acquisition by way of the scheme. We previously noted that the acquisition of SPH aligns with Keppel’s Vision 2030 of improving earnings quality, increasing scale and pursuing new growth initiatives. The modest premium of both competing offers to SPH’s historical long-term multiples and share prices suggests that there is room for Keppel to bump its offer and start a bidding war. 

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/suntec-reit" target="_blank" data-smartkarma-citation="entities:151:1" rel="noopener">Suntec REIT (SUN SP)</a> reported its 3Q21 business updates pre-market on 22 Oct 21. In this note, we will analyze its performance for the period, current capital management, and share our thoughts on its outlook.</p>

Suntec REIT (SUN SP) reported its 3Q21 business updates pre-market on 22 Oct 21. In this note, we will analyze its performance for the period, current capital management, and share our thoughts on its outlook.

Suntec REIT 3Q21 - Higher Topline and Gearing, Only Difference Is the Former Was One-Off

Singapore

Keppel REIT operates as a commercial real estate investment trust. The Trust owns and invests in a portfolio of income-producing office buildings and related real estate assets. Keppel REIT offers its services in Asia and Australia.

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Keppel REIT (KREIT SP)

SPH Update: Keppel, SPH REIT Chain Offer, and Cuscaden Strategy

Cuscaden has clarified the Chain Rule Offer Price for SPH REITs should their Scheme Proposal become effective, but they need to bid up or fold....

Travis Lundy

Last Week in Event SPACE: Japan Post, Singapore Press, Siam Future, 51job, Kunlun, Shinsei Bank

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Asia-Pac Weekly Risk Arb Summary: Singapore Press, Ausnutria, Shinsei, Golden Throat, Over The Wire

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

SPH’s Rival Offer from Cuscaden

The modest premium of both competing offers to SPH’s historical long-term multiples and share prices suggests that there is room for Keppel to bump...

Arun George

Suntec REIT 3Q21 - Higher Topline and Gearing, Only Difference Is the Former Was One-Off

Suntec REIT (SUN SP) reported its 3Q21 business updates pre-market on 22 Oct 21. In this note, we will analyze its performance, current capital...

Clarence Chu

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