Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Highly experienced ex-Delta One trader with 17 years of experience trading arbitrage and related strategies across Asian markets.

Exempt Financial Adviser (EFA) under CrossASEAN Research Pte Ltd.

It is important to note that the information provided by Periscope Analytics is based on publicly available data and own knowledge, which has been gathered and synthesized from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions.

All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include, but are not limited to, company announcements, exchange filings, ETF and other passive investment vehicle holdings, and free float and volume data from third-party data providers. Periscope Analytics does not guarantee the accuracy and completeness of the forecasts, estimates and/or other information.

Pan-Asia Index Rebalances/ Events/ Delta One

Keppel Corp to Acquire SPH Ex Media: Details and Index Implications

Keppel Corp / SPH: One Step Closer to Privatisation

Event-Driven

<div><p>On 30 March, <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 that it was undergoing a strategic review to consider options for its various businesses. On 6 May, the company announced that it would be transferring its media business to a not-for-profit entity.</p></div><div>
<p>Then, on 2 August, <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> announced that it was proposing to acquire <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> ex the media business and then delist and privatise SPH. Under the terms of the Scheme, for each share of <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> held, shareholders will receive cash of S$0.668, 0.596 units 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 0.782 units of <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a>, valuing SPH at S$2.0987/share. With a large part of the value tied to other listed stocks, the amount that SPH shareholders would receive kept moving around.</p>
<p>On 29 October, Cuscaden Peak proposed to acquire <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> in an all cash deal at S$2.10/share. That compared to a price of S$1.99/share for SPH at the close on 28 October and an equivalent value of S$2.0861/share from the Keppel offer.</p>
<p>On 1 November, <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> closed at S$2.12/share, higher than the Cuscaden offer. But with the rally (and short covering) in <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 S$2.12/share price was a discount to the value of S$2.1548/share from the Keppel deal.</p>
<p>Last evening, just before the stroke of midnight, <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> announced that it was making a compelling final offer of S$2.351/share 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>, 12% higher than the initial offer and the result of a S$0.2/share increase in the cash consideration. The S$2.351/share value could move lower on a drop in <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>, but is likely to remain higher than the Cuscaden offer. The revised scheme consideration will not be adjusted by the S$0.03/share final dividend.</p>
<p>We do not see Cuscaden increasing their cash offer to match the Keppel offer. Even if they do, an increase in the stock prices 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> could take the value of the Keppel offer even higher.</p>
</div>

On 30 March, Singapore Press Holdings (SPH SP) announced that it was undergoing a strategic review to consider options for its various businesses. On 6 May, the company announced that it would be transferring its media business to a not-for-profit entity.
Then, on 2 August, Keppel Corp (KEP SP) announced that it was proposing to acquire Singapore Press Holdings (SPH SP) ex the media business and then delist and privatise SPH. Under the terms of the Scheme, for each share of Singapore Press Holdings (SPH SP) held, shareholders will receive cash of S$0.668, 0.596 units of Keppel REIT (KREIT SP) and 0.782 units of SPH REIT (SPHREIT SP), valuing SPH at S$2.0987/share. With a large part of the value tied to other listed stocks, the amount that SPH shareholders would receive kept moving around.
On 29 October, Cuscaden Peak proposed to acquire Singapore Press Holdings (SPH SP) in an all cash deal at S$2.10/share. That compared to a price of S$1.99/share for SPH at the close on 28 October and an equivalent value of S$2.0861/share from the Keppel offer.
On 1 November, Singapore Press Holdings (SPH SP) closed at S$2.12/share, higher than the Cuscaden offer. But with the rally (and short covering) in Keppel REIT (KREIT SP) and SPH REIT (SPHREIT SP), the S$2.12/share price was a discount to the value of S$2.1548/share from the Keppel deal.
Last evening, just before the stroke of midnight, Keppel Corp (KEP SP) announced that it was making a compelling final offer of S$2.351/share for Singapore Press Holdings (SPH SP), 12% higher than the initial offer and the result of a S$0.2/share increase in the cash consideration. The S$2.351/share value could move lower on a drop in Keppel REIT (KREIT SP) and SPH REIT (SPHREIT SP), but is likely to remain higher than the Cuscaden offer. The revised scheme consideration will not be adjusted by the S$0.03/share final dividend.
We do not see Cuscaden increasing their cash offer to match the Keppel offer. Even if they do, an increase in the stock prices of Keppel REIT (KREIT SP) and SPH REIT (SPHREIT SP) could take the value of the Keppel offer even higher.


Singapore Press Holdings (SPH SP) - Keppel Back in Pole Position