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Cuscaden raised offer price. Following Keppel’s revised offer, competitor, Cuscaden has also raised its offer for SPH from total offer price of S$2.10 (all cash) to S$2.36 (all cash option) or S$2.40 (cash + REIT option). This is superior to Keppel’s cash + REIT offer totalling S$2.351/share, from offer price perspective.

Cuscaden’s Offer
Initial Offer @ 29-OctRevised Offer @ 15-Nov
Consideration BreakdownS$/shareOption1: All CashOption2: Cash + REIT
Cash consideration2.1002.3601.602
0.782 SPH REIT Units 0.798
Total Consideration2.1002.3602.400
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Keppel’s Offer
Consideration BreakdownInitial Offer
@ 2-Aug (S$/share)
Final Offer
@ 9-Nov (S$)
Cash consideration
(by Keppel)
0.6680.868
0.596 Keppel REIT Units
(by Keppel)
0.7150.685
0.782 SPH REIT Units
(Dividend-in-specie by SPH)
0.7160.798
Total Consideration2.0992.351

SPH’s board preliminary recommendation.Subject to the opinions of the IFA to be issued in the composite document in relation to the Keppel Scheme and Composite Document, and in the absence of further superior competing offer, the Inddepent Directors preliminarily recommend to the Shareholders to vote (i) AGAINST the Keppel Scheme at the Keppel Scheme Meeting; and (ii) IN FAVOUR of the Cuscaden Scheme at the Cuscaden Scheme Meeting. We are on research blackout for SPH, which has called for trading halt this morning.

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Keppel’s offer has quicker completion timeline, by at least 8-weeks.Keppel will likely make an official statement in relation to the SPH revised offer. As Keppel has stated in previous announcement that its revised offer is final, it will likely not revising up its offer price. While Cuscaden’s offer price is higher by 0.4% to 2.1% than Keppel’s, Keppel’s proposal has cleared regulatory approvals and would have quicker completion timeline, by at least by 8-weeks. SPH would not be able to host an alternative Scheme Meeting within 8-weeks of Keppel’s Scheme meeting.

SPH deal not priced in Keppel’s share price. Keppel’s share price were around S$5.45 level prior the announcement of SPH privatisation. Share price reacted positively to S$5.58 post announcement but gains were given back few days later. We believe Keppel’s current share price at < S$5.30 level does not priced in the SPH deal at all. Though, it removes a potential catalyst to Keppel.

No change to our BUY rating and S$6.20 TP on Keppel.