HPL, Ong Beng Seng, Temasek units CLA and Mapletree in rival offer for SPH

S$2.10-a-share full cash offer pips Keppel's S$2.099 bid in cash and Reit units

Oct 29, 2021

A CONSORTIUM comprising Hotel Properties (HPL), HPL: H15 +2.73% businessman Ong Beng Seng, and two Temasek-linked entities, CLA and Mapletree, are proposing to acquire Singapore Press Holdings (SPH) HPL: H15 +2.73% at S$2.10 per share in cash.

In an announcement on Friday (Oct 29) before the market opened, the consortium announced it had on Thursday submitted to the SPH board a proposed acquisition for all the shares of SPH via a scheme of arrangement.

The consortium vehicle, Cuscaden Peak, is 40 per cent held by a HPL unit called Tiga Stars, 30 per cent held by Temasek unit CLA Real Estate Holdings, and 30 per cent held by the Mapletree group. Property group Mapletree is also a Temasek-linked entity.

CLA owns property group CapitaLand, real estate assets in Australia and investments in the life sciences sector. It is the majority owner of CapitaLand Investments.

Tiga Stars is 70 per cent stake owned by HPL and 30 per cent owned by Como Holdings. The latter is beneficially owned by Ong Beng Seng, who is also the managing director and deemed controlling shareholder of HPL.

The offer price proposed by Cuscaden is slightly higher than what has been offered by Keppel Corp, another Temasek-linked entity.

SPH had in August received a privatisation offer from Keppel at S$2.099 per share. This offer comprises cash of S$0.668 per share, 0.596 Keppel Reit unit (valued at S$0.715) and 0.782 SPH Reit unit (valued at S$0.716) per share. It is also to take place via a scheme of arrangement.

Based on Thursday's (Oct 28) closing price of S$1.10 and S$0.975 respectively for Keppel Reit and SPH Reit units, Keppel's privatisation offer would have been worth around S$2.086 per share.

The Keppel deal also includes a break fee of S$34 million payable by SPH if a superior competing offer emerges that the independent directors deem more favourable for shareholders.

Keppel also has the option, in the event a competing offer emerges, to make a voluntary conditional cash offer for SPH in lieu of proceeding with the acquisition by way of the scheme.

Keppel said on Friday morning that it is reviewing the matter and willl make an announcement at the appropriate time.

SPH owns around 65.4 per cent of SPH Reit. The 0.782 SPH Reit units under Keppel's proposed privatisation offer are part of a distribution-in-specie of 45.4 per cent of SPH's stake in SPH Reit, while Keppel would retain 20 per cent of SPH Reit.

Cuscaden said that subject to the finalisation of the terms of the possible scheme, the completion of its proposed cash acquistion of SPH will result in Cuscaden incurring an obligation to undertake a chain offer for all units in SPH Reit in accordance with the Singapore Code on Take-overs and Mergers.

Cuscaden said its proposed consideration will not be reduced or adjusted for the break fee, nor for SPH's dividend of S$0.03 per share for FY2021 ended Aug 31.

The Cuscaden proposal is also subject to SPH accepting and finalising the terms of the scheme with Cuscaden and entering into definitive agreements to effect the scheme. There is currently no legally binding agreement between SPH and Cuscaden.

CGS-CIMB analyst Lim Siew Khee said the consortium may have decided to bid for SPH on account of its rich portfolio, which would give SPH shareholders more options to cash out their shares.

United First Partners' head of Asian research Justin Tang noted that Ong is a notable member of the consortium. The Malaysia-born tycoon played a key role in bringing the Formula One race to Singapore, and had also partnered with Temasek back in 2002 to launch a takeover bid for steelmaker NatSteel.

Shares of SPH closed flat on Thursday at S$1.99 each. They were halted on Friday morning.