Subject to certain Pre-Conditions, Kyanite Investment Holdings Pte. Ltd. (the Offeror), intends to make a Partial Offer to acquire 30.55% of Shares in Keppel Corporation Limited (Keppel) at S$7.35 per Share in cash.
The Offeror is an indirect wholly-owned subsidiary of Temasek Holdings (Private) Limited (Temasek), which already directly owns 20.45% of Shares in the Company. If successful, the Partial Offer will result in Temasek and the Offeror directly owning 51% of the Shares in Keppel and the Offeror Concert Party Group3having a resultant shareholding in Keppel of 52.04% at the close of the Partial Offer.
The intention is for Keppel to remain listed on the Singapore Exchange (the “SGX-ST”). If successful, the Partial Offer will allow Offer Shareholders to monetise a portion or potentially all of their holdings in Keppel, at a premium over the last traded price of the Shares.
The Partial Offer will be made if and when each of the Pre-Conditions is satisfied or waived (at the discretion of the Offeror). Such Pre-Conditions include the obtaining of domestic and foreign regulatory approvals, the process for which is expected to take several months. The full list of Pre-Conditions is set out in Schedule 1 of the Pre-Conditional Partial Offer Announcement.
Assuming there is no change to the total number of Shares as at the Record Date4, the Offer Shares to be acquired would represent 30.55% of these Shares.
Offer Details
If and when the Partial Offer is made, the Offeror will offer S$7.35 in cash (the “Offer Price”) for each Share acquired as part of the Partial Offer, implying 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, 18 October 2019. Further details of premia over other timeframes are shown in the Annex.
Rationale for the Partial Offer and Intentions
The Offeror does not intend to delist or privatise the Company; the Company will remain listed on the SGX-ST.
The Partial Offer represents an opportunity for Offer Shareholders to realise 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.
Following the successful close of the Partial Offer, the Offeror intends to work with the board of directors of the Company in undertaking a comprehensive strategic review of its businesses (the “Strategic Review”) 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.
The Offeror remains open to all possibilities arising from the Strategic Review. The Strategic Review may result in
(i) the Company refocusing on and strengthening certain businesses, and/or
(ii) potential corporate actions including, but not limited to, joint ventures, strategic partnerships, acquisitions, disposals, mergers, or other transactions involving the Company, in each case as determined by the board of directors of the Company in the best interests of the Company and Shareholders.
Mr Tan Chong Lee, President, Temasek International and Director of the Offeror, 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.”
Pre-Conditions to the Making of the Partial Offer
The Partial Offer will be made only if each of the Pre-Conditions is satisfied or waived (at the discretion of the Offeror).
As the Keppel group operates businesses globally, and in certain regulated industries, approvals from various regulatory agencies (both domestic and foreign) will be necessary or appropriate before the Partial Offer can be made.
The making of the Partial Offer is also subject to, among others, (i) the Keppel group’s financial performance and condition not deteriorating meaningfully over the period and (ii) where applicable, the consents of counterparties to material contracts which a Keppel group company is party to, being obtained.
Each of the Pre-Conditions must be satisfied or waived (at the discretion of the Offeror) by 21 October 2020.5Please refer to Schedule 1 of the Pre-Conditional Partial Offer Announcement for the full list of Pre-Conditions.
Conditions for the Partial Offer to be Successful
Once the Partial Offer is made, the following conditions must be met for it to be successful:
• The Partial Offer must be approved by votes representing more than 50% in value of the valid votes received from Shareholders as at the Record Date (the Offeror Concert Party Group and its associatescannot vote);
• Offer Shares tendered by Offer Shareholders must result in Temasek’s and the Offeror's aggregate direct shareholding in the Company reaching 51% as at the Record Date; AND
• There being (i) no regulatory impediment prohibiting, materially delaying or restricting the Partial Offer and (ii) no loss of material licences held by the Keppel group of companies.
Cautionary Note
The Partial Offer will only be made if and when each of the Pre-Conditions is satisfied or waived (at the discretion of the Offeror). Shareholders should note that there is no certainty that the Pre-Conditions will be satisfied and/or waived and that the Partial Offer will be made. Shareholders should exercise caution and seek appropriate independent advice when dealing in the Shares.
Responsibility Statement
The directors of the Offeror (including any director who may have delegated detailed supervision of the preparation of this press release (including attachments hereto)) have taken all reasonable care to ensure that the facts stated and opinions expressed in this press release (including attachments hereto) are fair and accurate and that no material facts have been omitted from this press release (including attachments hereto), and they jointly and severally accept responsibility accordingly.
Where any information has been extracted or reproduced from published or otherwise publicly available sources or obtained from the Company, the sole responsibility of the directors of the Offeror has been to ensure through reasonable enquiries that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in this press release (including attachments hereto).
Financial Adviser
Morgan Stanley Asia (Singapore) Pte. has been appointed as sole financial adviser to the Offeror in connection with the Partial Offer.
