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.

Event-Driven

<p><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>/SPH announced a privatisation offer from <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>. Keppel is taking private SPH through via a scheme of arrangement. 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$2.099 per SPH share, which is a 39.9% premium to the share price of S$1.50 on 30 March 2021 (announcement of SPH’s strategic review) and an 11.6% premium to the share price of S$1.88 on 30 July 2021 (last trading day). </p><p>The privatisation proposal is the culmination of the SPH’s strategic review to unlock shareholder value. Keppel's offer was the best offer from several proposals evaluated, according to SPH management. The strategic review commenced with the announcement of the media business restructuring announced on 6 May. Post completion of the media business restructuring (requires approval at the EGM in Aug-Sep), SPH would be released from NPPA restrictions including the 5% shareholding cap restriction. Due to the impending lifting of the 5% shareholding cap, the SPH Board's preference was an offer for the whole SPH, to ensure the emergence of a controlling shareholder.</p><div class="content-highlight"><p>The key conditions for the successful privatisation are the completion of the media business restructuring, regulatory approval, SPH and Keppel shareholder approval. The modest premium/discount to historical long-term multiples and share prices is unlikely to excite long-term SPH shareholders. The offer price is largely designed to appeal to SPH shareholders lacking patience for SPH to unlock value through capital recycling (such as a listing of PBSA assets, disposal of investments), a post-COVID-19 recovery particularly in its property businesses and improving earnings quality through diversifying into defensive assets. Overall, while the implied offer price is not a knockout bid, it is ok in the context of our SoTP valuation (post-media business restructuring). </p></div>

Singapore Press Holdings (SPH SP)/SPH announced a privatisation offer from Keppel Corp (KEP SP). Keppel is taking private SPH through via a scheme of arrangement. 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$2.099 per SPH share, which is a 39.9% premium to the share price of S$1.50 on 30 March 2021 (announcement of SPH’s strategic review) and an 11.6% premium to the share price of S$1.88 on 30 July 2021 (last trading day). The privatisation proposal is the culmination of the SPH’s strategic review to unlock shareholder value. Keppel's offer was the best offer from several proposals evaluated, according to SPH management. The strategic review commenced with the announcement of the media business restructuring announced on 6 May. Post completion of the media business restructuring (requires approval at the EGM in Aug-Sep), SPH would be released from NPPA restrictions including the 5% shareholding cap restriction. Due to the impending lifting of the 5% shareholding cap, the SPH Board's preference was an offer for the whole SPH, to ensure the emergence of a controlling shareholder.The key conditions for the successful privatisation are the completion of the media business restructuring, regulatory approval, SPH and Keppel shareholder approval. The modest premium/discount to historical long-term multiples and share prices is unlikely to excite long-term SPH shareholders. The offer price is largely designed to appeal to SPH shareholders lacking patience for SPH to unlock value through capital recycling (such as a listing of PBSA assets, disposal of investments), a post-COVID-19 recovery particularly in its property businesses and improving earnings quality through diversifying into defensive assets. Overall, while the implied offer price is not a knockout bid, it is ok in the context of our SoTP valuation (post-media business restructuring). 

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<p><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> had been undergoing a strategic review - something long awaited, and perpetually not quite done. The outcome is going to disappoint some (thus my title).</p><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> made an <a href="https://links.sgx.com/FileOpen/Announcement.ashx?App=Announcement&amp;FileID=665172" target="_blank" rel="noopener">announcement</a> (<a href="https://links.sgx.com/FileOpen/Media%20Release.ashx?App=Announcement&amp;FileID=665173" target="_blank" rel="noopener">media release</a>, <a href="https://links.sgx.com/FileOpen/Analyst%20Briefing.ashx?App=Announcement&amp;FileID=665174" target="_blank" rel="noopener">analyst presentation</a>) that it would undergo a Proposed Restructuring (defined by a Business Restructuring Deed ("BRD")) which would spin off the Media Business into a Media Holdco which would be run as a not-for-profit in the form of a Company Limited by Guarantee (CLG), basically a charity in corporate form (subject to the Companies Act). </p><p>The quick and dirty of the situation is that SPH is giving away 6.6% of its equity (and 12+% of its market cap) to the ether so that it is no longer carrying the media business around its neck like an albatross. </p><p>The Media business has seen revenue declines in the traditional print space, and SPH Media ad revenue fell 39% from FY2018 to FY2020. Operating revenue in the past five years has halved, and in FY2020, the SPH Media business posted its first ever loss. H1 2021 has seen the run-rate worsen further. </p><p>The idea is to give away the business, and assets to help it fund itself, to ring-fence SPH from SPH Media going forward, and to remove the strictures of the Newspaper and Printing Presses Act ("NPPA") which bind SPH today.</p><p>One can think of it as an owner having to recapitalise a loss-making business before selling it for a dollar. <em>Sometimes something is worth less than nothing. </em></p><p>It is not a done deal. There are conditions to complete. But it is worthwhile looking at the before/after to determine the "value" of SPH going forward because while revenue will drop, operating profits should <em>increase</em> on a pro-forma basis, and dropping the NPPA restrictions has the potential to make things quite interesting in the medium-long-term.</p><p>More below the fold. </p>

Singapore Press Holdings (SPH SP) had been undergoing a strategic review - something long awaited, and perpetually not quite done. The outcome is going to disappoint some (thus my title).Today, Singapore Press Holdings (SPH SP) made an announcement (media release, analyst presentation) that it would undergo a Proposed Restructuring (defined by a Business Restructuring Deed ("BRD")) which would spin off the Media Business into a Media Holdco which would be run as a not-for-profit in the form of a Company Limited by Guarantee (CLG), basically a charity in corporate form (subject to the Companies Act). The quick and dirty of the situation is that SPH is giving away 6.6% of its equity (and 12+% of its market cap) to the ether so that it is no longer carrying the media business around its neck like an albatross. The Media business has seen revenue declines in the traditional print space, and SPH Media ad revenue fell 39% from FY2018 to FY2020. Operating revenue in the past five years has halved, and in FY2020, the SPH Media business posted its first ever loss. H1 2021 has seen the run-rate worsen further. The idea is to give away the business, and assets to help it fund itself, to ring-fence SPH from SPH Media going forward, and to remove the strictures of the Newspaper and Printing Presses Act ("NPPA") which bind SPH today.One can think of it as an owner having to recapitalise a loss-making business before selling it for a dollar. Sometimes something is worth less than nothing. It is not a done deal. There are conditions to complete. But it is worthwhile looking at the before/after to determine the "value" of SPH going forward because while revenue will drop, operating profits should increase on a pro-forma basis, and dropping the NPPA restrictions has the potential to make things quite interesting in the medium-long-term.More below the fold. 

Singapore Press Own Time Own Target Restructuring Lor... (Come I Clap For You)

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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

Manulife US REIT (MUST) / Equity Bottom-Up

<p>In my previous insights on Singapore REITs I have spoken about a number of different sectors, however, I haven't spoken about the overseas focussed REITs, so far.</p>
<p>In this insight, I'll take a closer look at some of the Singapore listed EU/US focussed REITs.</p>
<p>Links to my previous REITs insights:</p>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/singapore-reits-what-s-been-cooking-this-year" target="_blank" rel="noopener">Singapore REITs - What’s Been Cooking This Year,</a> I spoke about how the REITs have performed this year and touched upon some of the factors that have been driving them. </li>
<li>
<a href="https://www.smartkarma.com/insights/trade-ideas-for-sgreits-retail-reits-share-price-has-been-more-resilient-than-it-should-be" target="_blank" rel="noopener">Trade Ideas for SGREITs - Retail REITs Share Price Has Been More Resilient than It Should Be,</a> I spoke about the factors that have been impacting retail REITs. </li>
<li>
<a href="https://www.smartkarma.com/insights/trade-ideas-sg-office-reits-this-time-it-s-different" target="_blank" rel="noopener">Trade Ideas SG Office REITs - This Time It’s Different</a> I spoke about how the office REITs might fare better.</li>
<li>
<a href="https://www.smartkarma.com/insights/trade-ideas-sg-industrial-reits-bigger-names-have-been-holding-up-a-little-too-well" target="_blank" rel="noopener">Trade Ideas SG Industrial REITs - Bigger Names Have Been Holding up a Little Too Well </a> I spoke about the industrial REITs</li>
<li>
<a href="https://www.smartkarma.com/insights/singapore-reits-get-out-of-jail-free-card-for-the-tenants" target="_blank" rel="noopener">Singapore REITs - Get Out of Jail Free Card, for the Tenants</a> I spoke about how the recent changes announced by the government would benefit the smaller tenants more than the landlords.</li>
</ul>

In my previous insights on Singapore REITs I have spoken about a number of different sectors, however, I haven't spoken about the overseas focussed REITs, so far.
In this insight, I'll take a closer look at some of the Singapore listed EU/US focussed REITs.
Links to my previous REITs insights:


Singapore REITs - What’s Been Cooking This Year, I spoke about how the REITs have performed this year and touched upon some of the factors that have been driving them. 

Trade Ideas for SGREITs - Retail REITs Share Price Has Been More Resilient than It Should Be, I spoke about the factors that have been impacting retail REITs. 

Trade Ideas SG Office REITs - This Time It’s Different I spoke about how the office REITs might fare better.

Trade Ideas SG Industrial REITs - Bigger Names Have Been Holding up a Little Too Well  I spoke about the industrial REITs

Singapore REITs - Get Out of Jail Free Card, for the Tenants I spoke about how the recent changes announced by the government would benefit the smaller tenants more than the landlords.


Trade Ideas SG EU/US Focus REITs - The Orphaned Lot Is Starting to Look Interesting

Equity Capital Markets

United Hampshire US REIT / Equity Capital Markets

<div><p>United Hampshire US REIT (UHUS) raised around US$324m in its Singapore IPO. UHUS will invest in  grocery-anchored and necessity-based retail properties, and self-storage facilities, located in the U.S. </p></div><div><p>The initial portfolio consists of 22 assets with an aggregate net lettable area (NLA) of 3.17m sqft on the East Coast of the U.S. The portfolio comprises 18 grocery &amp; necessity properties with a total NLA of 2.86m sq ft and four self-storage properties with a total NLA of 0.31m sq ft. The aggregate purchase consideration payable is US$582.5m.</p></div><div>
<p>In my previous notes I looked at:</p>
<ul><li>The company’s past performance and highlighted some of the issues, <a href="https://www.smartkarma.com/insights/united-hampshire-us-reit-ipo-e-commerce-resistant-maybe-but-still-not-doing-great" target="_blank" rel="noopener">United Hampshire US REIT IPO - E-Commerce Resistant Maybe but Still Not Doing Great</a>, </li></ul>
</div><div>
<ul><li>Talked about valuations and ran the deal through our ECM framework, <a href="https://www.smartkarma.com/insights/united-hampshire-us-reit-ipo-yield-looks-enticing-but-falls-short-on-multiple-measures" target="_blank" rel="noopener">United Hampshire US REIT IPO - Yield Looks Enticing but Falls Short on Multiple Measures</a>
</li></ul>
<p>In this insight, I'll re-visit some of the deal dynamics and provide a table with implied valuations at different share prices.</p>
</div>

United Hampshire US REIT (UHUS) raised around US$324m in its Singapore IPO. UHUS will invest in  grocery-anchored and necessity-based retail properties, and self-storage facilities, located in the U.S. The initial portfolio consists of 22 assets with an aggregate net lettable area (NLA) of 3.17m sqft on the East Coast of the U.S. The portfolio comprises 18 grocery &amp; necessity properties with a total NLA of 2.86m sq ft and four self-storage properties with a total NLA of 0.31m sq ft. The aggregate purchase consideration payable is US$582.5m.
In my previous notes I looked at:
The company’s past performance and highlighted some of the issues, United Hampshire US REIT IPO - E-Commerce Resistant Maybe but Still Not Doing Great, 

Talked about valuations and ran the deal through our ECM framework, United Hampshire US REIT IPO - Yield Looks Enticing but Falls Short on Multiple Measures

In this insight, I'll re-visit some of the deal dynamics and provide a table with implied valuations at different share prices.


United Hampshire US REIT IPO Trading - Peers Have Corrected by 5-13%

<div><p>United Hampshire US REIT (UHUS) aims to raise up to US$325m in its Singapore IPO. UHUS will invest in  grocery-anchored and necessity-based retail properties, and self-storage facilities, located in the U.S. </p></div><div><p>The initial portfolio consists of 22 assets with an aggregate net lettable area (NLA) of 3.17m sqft on the East Coast of the U.S. The portfolio comprises 18 grocery &amp; necessity properties with a total NLA of 2.86m sq ft and four self-storage properties with a total NLA of 0.31m sq ft. The aggregate purchase consideration payable is US$582.5m.</p></div><div>
<p>In my previous note, <a href="https://www.smartkarma.com/insights/united-hampshire-us-reit-ipo-e-commerce-resistant-maybe-but-still-not-doing-great" target="_blank" rel="noopener">United Hampshire US REIT IPO - E-Commerce Resistant Maybe but Still Not Doing Great</a>, I looked at the company’s past performance and highlighted some of the issues.</p>
<p>In this note, I'll talk about valuations and run the deal through our ECM framework</p>
</div>

United Hampshire US REIT (UHUS) aims to raise up to US$325m in its Singapore IPO. UHUS will invest in  grocery-anchored and necessity-based retail properties, and self-storage facilities, located in the U.S. The initial portfolio consists of 22 assets with an aggregate net lettable area (NLA) of 3.17m sqft on the East Coast of the U.S. The portfolio comprises 18 grocery &amp; necessity properties with a total NLA of 2.86m sq ft and four self-storage properties with a total NLA of 0.31m sq ft. The aggregate purchase consideration payable is US$582.5m.
In my previous note, United Hampshire US REIT IPO - E-Commerce Resistant Maybe but Still Not Doing Great, I looked at the company’s past performance and highlighted some of the issues.
In this note, I'll talk about valuations and run the deal through our ECM framework


United Hampshire US REIT IPO - Yield Looks Enticing but Falls Short on Multiple Measures

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Prime US REIT (PRIME SP)

SPH’s Privatisation by Keppel

SPH announced a privatisation offer from Keppel for a total consideration is S$2.099 per share. While the implied offer price is not a knockout...

Arun George

Singapore Press Own Time Own Target Restructuring Lor... (Come I Clap For You)

SPH has announced a business restructuring to divest itself of its loss-making Media Holdings, paying to make it go away. This changes structure -...

Travis Lundy

Trade Ideas SG EU/US Focus REITs - The Orphaned Lot Is Starting to Look Interesting

In my previous insights on Singapore REITs I have spoken about a number of different sectors, however, I haven't spoken about the overseas focussed...

Sumeet Singh

United Hampshire US REIT IPO Trading - Peers Have Corrected by 5-13%

United Hampshire US REIT (UHUS) raised around US$324m in its Singapore IPO. UHUS will invest in grocery-anchored and necessity-based retail...

Sumeet Singh

United Hampshire US REIT IPO - Yield Looks Enticing but Falls Short on Multiple Measures

United Hampshire US REIT (UHUS) aims to raise up to US$325m in its Singapore IPO. UHUS will invest in grocery-anchored and necessity-based retail...

Sumeet Singh

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