Date: November 23, 2021
To: Cuscaden Peak Pte. Ltd.
Through: Mr. Christopher Lim Tien Hock, Group ED from Hotel Properties Ltd
Questions to Cuscaden Peak Pte. Ltd
On October 29, Cuscaden Peak Pte. Ltd. (Cuscaden), a consortium comprising Hotel Properties Limited, CLA Real Estate Holdings Pte Ltd and Mapletree Investments Pte Ltd, announced its proposal to acquire Singapore Press Holdings Limited (“SPH”) by way of a scheme of arrangement.
Under the Cuscaden Scheme, the initial consideration was $2.10 in cash for each SPH share. Following the revised and final offer by Keppel, Cuscaden revised its offer on 15 November 2021 to $2.36 in cash or $1.602 in cash along with 0.782 SPH REIT unit per share. Subject to IFA’s opinion, the preliminary recommendation by SPH is that the revised Cuscaden Scheme is superior to Keppel’s final offer.
In order to help SPH shareholders better understand the two competing schemes, SIAS has prepared the following questions for Cuscaden:
Why is Cuscaden’s offer deemed to be superior?
On 21 November 2021, Cuscaden announced the receipt of regulatory approvals for the Cuscaden Scheme from the Monetary Authority of Singapore (“MAS”) and the Info-Communications Media Development Authority (“IMDA”). The clearance from the Foreign Investment Review Board (“FIRB approval”) under the Australian Foreign Acquisitions and Takeovers Act 1975 remains outstanding and Cuscaden will provide updates of the FIRB approval in due course:
- In terms of deal certainty, would Cuscaden be able to obtain the FIRB approval before SPH shareholders vote on the Keppel Scheme?
Cuscaden is deemed to have given a waiver of the Material Adverse Effect (MAE) clause, upon the despatch of the composite document:
- Has Cuscaden considered waiving the MAE clause before the Keppel Scheme Meeting so as to remove this uncertainty for SPH shareholders who have to decide between the two competing offers? Can Cuscaden show its commitment to the deal?
Cuscaden has not given a final offer to SPH shareholders even though the Cuscaden Scheme is currently perceived to be the superior offer by SPH:
- Will Cuscaden be giving SPH shareholders a further improved (and final) offer?
- Given that Keppel and Cuscaden have bidded against each other for SPH, why should SPH shareholders accept Cuscaden’s offer for SPH at this juncture instead of keeping faith with the SPH board/management to crystallise value for shareholders?
On the possible chain offer price for SPH REIT:
Unlike the Keppel Scheme, depending on the final proportion of SPH shareholders that elect between the two options, the completion of the scheme may result in Cuscaden incurring an obligation to undertake a chain offer for all the units in SPH REIT. As confirmed by SIC, the minimum offer price for the SPH REIT Chain Offer, if it is required to be made, will be $0.964 per SPH REIT unit. Cuscaden will not be obliged to offer a higher price:
- What are the long-term plans for SPH REIT should the Cuscaden Scheme be successful? What is Cuscaden’s intention with regard to the listing status of SPH REIT? If a chain offer is triggered, what are the factors that will determine the chain offer price for SPH REIT, given the current trading price at $1.01 as of 22 November 2021?
On the date of the Cuscaden Scheme Meeting/expected completion date:
The Cuscaden Scheme currently has an indicative completion date of February 2022. This compares against the indicative completion date of the Keppel Scheme of January 2022. SPH is restricted from convening the Cuscaden Scheme Meeting within eight weeks from the Keppel Scheme Meeting, as part of its contractual terms under the terms of the Keppel Scheme:
- Can Cuscaden confirm that SPH is free to schedule its Cuscaden Scheme Meeting (without the 8-week buffer) if the Keppel Scheme is not approved by SPH shareholders on 8 December? If so, when is the earliest the Cuscaden Scheme Meeting can be held? Will Cuscaden be conducting a Scheme meeting and/or have live “Q&A” and live voting at the hybrid/online Scheme Meeting? What are the outstanding milestones that may delay the expected completion date?
President and CEO
To: The Board of Keppel Corporation Limited
Through: Mr. Loh Chin Hua, Chief Executive
Questions to Keppel Corporation Limited
On August 2, Keppel Corporation Limited through its wholly-owned subsidiary, Keppel Pegasus Pte. Ltd., announced the proposed acquisition of Singapore Press Holdings Limited (“SPH”) by way of a scheme of arrangement.
The terms of the scheme were improved by Keppel on 9 November after a competing bid by Cuscaden Peak. As it stands today, the revised and final offer by Keppel consists of $0.868 cash (an increase of $0.2 from the initial offer), 0.782 SPH REIT unit and 0.596 Keppel REIT unit for each SPH share.
In response to media queries on Keppel’s position following the Implementation Agreement dated 15 November 2021 entered between SPH and Cuscaden Peak, Keppel reiterated that SPH is a strategic and attractive asset for Keppel which is uniquely positioned to realise the synergises in this proposed acquisition. However, Keppel has also stated that it will not do a transaction “at any cost” and the final offer is regarded as a “win-win”. Aside from price, Mr Loh Chin Hua has stressed that Keppel’s proposal has the “most deal certainty” for SPH shareholders.
In order to help SPH shareholders better understand the two competing schemes, SIAS has prepared the following questions for Keppel:
Why is Keppel’s offer deemed to be superior?
Keppel has waived its walk away right under the Material Adverse Effects (MAE) clause. This was reiterated in Keppel’s media release dated 16 November 2021. In contrast, a similar MAE clause remains in place for the competing Cuscaden Scheme until the date of the despatch of the Cuscaden Scheme document and is also subject to other conditions:
- How attractive is the MAE waiver to SPH shareholders?
- Given that Keppel shareholders can vote against the acquisition in the event of a MAE experienced by SPH, what steps will Keppel take to ensure the success of the Keppel shareholder meeting?
Keppel, as the first mover, has had a head start and has obtained the requisite regulatory approvals from the Foreign Investment Review Board of Australia and the Monetary Authority of Singapore. No approval is required from IMDA. Keppel has stressed that any competing offeror would have to go through the administrative processes to obtain the requisite approvals and that would take time:
- If so (and taking into account Question 1), can the board elaborate further if the Keppel offer really provides more “deal certainty” to SPH shareholders by the time the SPH shareholders need to finalise their vote at the Keppel Scheme Meeting (scheduled on 8 December)?
In the announcement made on 16 November 2021, it is noted that “the sooner the scheme is approved the better it is for SPH, so as to reduce any further uncertainty and instability for its various stakeholders and preserve value”:
- Could Keppel explain what it meant by “further uncertainty and instability”, and the urgency for SPH shareholders to cast their votes?
Some SPH shareholders have highlighted to SIAS that it would be fairer and easier for them to decide on the two offers if both offers are allowed to be considered at the same time:
- In the best interest of SPH shareholders, should they not consider the merits of both offers, before deciding on the offers?
Keppel has also stated that should its offer go through, SPH shareholders will be able to receive SPH REIT units and Keppel REIT units, the latter trading at a 10% discount to its NAV as of 30 September 2021 of $1.28 per unit:
- Can Keppel explain why it is beneficial to existing SPH shareholders to receive units of Keppel REIT that trades at a discount to NAV? What is Keppel REIT’s average discount to its NAV in the past 1 year, 3 years and 5 years so as to help SPH shareholders understand the attractiveness of receiving Keppel REIT units? Why are SPH shareholders asked to “trade” their exposure to the current SPH assets for commercial properties owned by Keppel REIT? It would appear that Keppel REIT units are included in the consideration to help Keppel reduce the cash outlay for the acquisition.
On the technicalities of Keppel’s offer:
While SPH is no longer able to enter into any other proposed scheme of arrangement after 16 November 2021, the deadline for any competing general offer is 1 December 2021, including Keppel which has the “Switch Option”:
- What are the factors being considered by Keppel on the Switch Option given that SPH has now declared that the Cuscaden Scheme is superior to the Keppel Scheme subject to the IFA’s opinion? When will Keppel announce its decision on the “Switch Option”?
On the conduct of the Scheme Meeting:
- Will Keppel be conducting a Scheme Meeting and/or have live “Q&A” and live voting at the hybrid/online Scheme Meeting? If not, what is the deadline for shareholders to submit their votes for the Scheme Meeting?
President and CEO