Temasek, a Singaporean investment company owned by the Government of Singapore, has announced its plans to buy a controlling interest in Keppel Corporation.
Temasek, which currently owns 20,45 percent in Keppel, intends to offer S$7.35 per share for 30,55% Keppel shares, an offer estimated to be valued at ~S$4,1 billion. The announcement of the intention to make an offer was made on Monday by Morgan Stanley, on behalf of Temasek’s subsidiary Kyanite Investment.
According to Temasek, the price to be offered implies a premium of approximately 26% over S$5.84, being the last traded price per share, and a premium of approximately 21% over S$6.07, being the volume-weighted average price per share (the VWAP) for the three-month period prior to and including Friday, October 18, 2019.
If successful, the offer will result in Temasek owning an aggregate 51% of Keppel Corporation, an industrial giant best known to Offshore Energy Today’s readers through its offshore rig building subsidiary Keppel Offshore & Marine.
Temasek has said it does not intend to delist or privatize Keppel, which will remain listed on the SGX-ST.
Opportunity for shareholders, business review for Keppel
“The Partial Offer represents an opportunity for Offer Shareholders to realize part or potentially all of their investment at a premium over the last traded price of the Shares, and to participate in the future financial performance of the Company through their retained equity interest. Temasek’s long-standing governance model is to support its portfolio companies operating independently and on commercial principles. Temasek does not involve itself in the operating or business decisions of its portfolio companies; these are properly the responsibility of the boards and management teams of the companies,” Temasek said.
But, if the offer is successful, Temasek said it planned to work with Keppel’s board of directors in “undertaking a comprehensive strategic review of its businesses” with the objective of creating sustainable value for all shareholders.
“In order to facilitate such a strategic review, the offeror may propose new directors to the board of directors of the company after the close of the partial offer,” Temasek said.
Temasek said it would remain open to all possibilities arising from the strategic review. The strategic review, Temasek said, may result in Keppel refocusing on and strengthening certain businesses, and/or potential corporate actions including, but not limited to, joint ventures, strategic partnerships, acquisitions, disposals, mergers, or other transactions involving Keppel, “in each case as determined by the board of directors of the company in the best interests of the company and shareholders.”
Tan Chong Lee, President, Temasek International said: “The partial offer reflects our view that there is inherent long term value in Keppel’s businesses, notwithstanding the challenges presented by the current business and economic outlook.”
He added: “The Partial Offer can only be made after the pre-conditions have been fulfilled or waived and this may take several months. For the partial offer to be successful, it will require both majority approval by shareholding of the votes cast and acceptances of not less than 30.55% of the total issued Shares.”
Offshore Energy Today Staff
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