Keppel Corporation has made a S$2.2bn (€1.37bn) bid to acquire the property and fund management businesses of listed media company Singapore Press Holdings (SPH).
Temasek-backed Keppel runs a diverse range of businesses, including real estate investment trusts (REITs) and infrastructure funds, and is looking to acquire SPH’s property portfolio, which includes suburban retail in Australia, student accommodation in Europe and senior housing in Singapore.
The deal is contingent on SPH hiving off its media business, which publishes Singapore newspaper The Straits Times, and would add S$10bn to the S$37bn in real estate and infrastructure assets managed by Keppel Capital.
Keppel is proposing a scheme of arrangement, with an offer of S$0.668 in cash and 0.596 Keppel REIT units per SPH share. Based on Keppel’s unit price of S$1.20 as of July 30, the proposal puts an enterprise value of S$3.4 billion on SPH.
“This transaction is a key part of Keppel’s Vision 2030 plan to transform and grow as one integrated company providing solutions for sustainable urbanisation,” CEO Loh Chin Hua told analysts and media today.
“In our view, SPH represents a rare and attractive opportunity for Keppel to acquire a quality platform that is not only financially attractive but strongly aligned with, and complementary to, Keppel’s business model and capabilities.
“We believe Keppel is uniquely positioned to enhance and unlock the value of SPH’s portfolio as there is a very natural fit between SPH’s businesses and three of Keppel’s four focus areas – namely asset management, urban development and connectivity.”
Loh said the deal would give Keppel a footprint in the growing purpose-built student-accommodation (PBSA) market in Europe through SPH’s specialist platforms that include Student Castle and Capitol Students, which collectively own some 7,700 beds across 18 European cities.
He added: “While the retail sector has been affected by COVID-19, we note that the SPH REIT portfolio, both in Singapore and Australia – particularly its suburban assets providing essential retail – has shown resilience during the peak of the pandemic.
“From Keppel’s perspective, having a high-quality retail-focused REIT in our stable will provide another avenue to recycle our retail assets in Singapore and overseas.”