A big advantage for shareholders of Singapore Press Holdings (SPH) in Cuscaden Peak' s all share offer is that it provides certainty at a time of rising interest rates. This and other advantages were highlighted in Cuscaden' s responses to questions from SIAS.

Cuscaden has reiterated that it has unconditionally and irrevocably waived its right to walk away from the acquisition of SPH upon the occurrence of a Material Adverse Effect (MAE) condition.

 

In the meantime Cuscaden has received all regulatory approvals from the Monetary Authority of Singapore, the   Info-Communications Media Development Authority (IMDA) and the Foreign Investment Review Board in Australia.  

 

&ldquo With the fulfilment of all regulatory approvals to be obtained by Cuscaden, the waiver of the MAE Condition, and no shareholder approval required on the part of Cuscaden, Cuscaden provides deal certainty to SPH shareholders. The success of the Cuscaden Scheme is now in the hands of SPH Shareholders,&rdquo Cuscaden says in the responses.

Cuscaden has two offers for SPH. An all cash offer of $2.36 values SPH above its net asset value of $2.18. A cash plus SPH REIT unit offer has a higher cash component of $1.60 compared to Keppel Corp&rsquo s cash offer of $0.868.

 

Cuscaden will also make a chain offer for SPH REIT, should it gain control of SPH as the latter holds around 65% stake of SPH REIT. SPH&rsquo s board has acknowledged that the Cuscaden Scheme is superior to the Keppel Scheme, the Cuscaden replies point out.

 

&ldquo This flexibility allows SPH Shareholders electing the Cuscaden all cash consideration to receive their proceeds with value certainty and no potential transaction costs, particularly in an environment of rising interest rates and the continued impact of Covid-19,&rdquo Cuscaden says. 

SPH Shareholders who prefer to continue to enjoy the future growth and dividends of SPH REIT can elect for the Cuscaden Cash and Units Consideration, while still receiving a meaningful cash consideration, Cuscaden adds. 

 

&ldquo The difference in value between both schemes has widened over time, between 15 November 2021 (being the date SPH acknowledged that the Cuscaden Scheme is a superior proposal in the Cuscaden Joint Announcement) and the latest closing prices as of 10 December 2021,&rdquo Cuscaden says.

  Cuscaden Peak is offering each SPH shareholder the option of an all-cash offer of $2.36, or $2.40 per share.

Cuscaden Peak has waived its rights to walk away from its bid for SPH in the event of a material adverse effect (MAE) to provide SPH shareholders with " greater transaction certainty" .

 

The consortium comprising Hotel Properties (HPL), CLA Real Estate Holdings and Mapletree Investments also announced on Thursday night (Dec 2) that it has received the requisite regulatory approval from the Foreign Investment Review Board in Australia, which represents the final outstanding approval needed.

 

With all approvals received and the waiver of the MAE condition, the Cuscaden scheme " now delivers higher transaction certainty" compared to the Keppel Corp scheme which still requires shareholder approval from Keppel' s shareholders, said Christopher Lim, HPL executive director and spokesman for Cuscaden.

 

" Cuscaden has worked hard to deliver this superior offer which now has greater transaction certainty. There is no additional shareholders' approval required by Cuscaden, and the success of the Cuscaden scheme is now in SPH shareholders' hands," said Mr Lim.

 

Cuscaden Peak is offering each SPH shareholder the option of an all-cash offer of $2.36, or $2.40 per share comprising $1.602 cash and 0.782 of an SPH Reit unit through a distribution-in-specie by SPH.

 

Keppel said its final consideration of $2.351 per SPH share as at Nov 9 represents a 57 per cent premium to SPH' s undisturbed trading price on March 30.

  This means the break fee won' t come out of the pockets of SPH shareholders if the Cuscaden offer succeeds, said the consortium.

 

SINGAPORE - Cuscaden Peak said on Wednesday (Dec 1) that the $34 million break fee payable to Keppel Corporation would be " indirectly borne" by the consortium if it prevails in its takeover bid for Singapore Press Holdings (SPH).

 

It noted that if the Cuscaden scheme succeeds and the break fee is payable by SPH, " since Cuscaden will own 100 per cent of SPH, the break fee will, in turn, at that stage be indirectly borne by Cuscaden" , it said in an exchange filing.

 

This means the break fee will not come out of the pockets of SPH shareholders if the Cuscaden offer succeeds, added the consortium, which is backed by businessman Ong Beng Seng' s Hotel Properties and two Temasek-linked entities - CLA Real Estate and Mapletree Investments.

 

Cuscaden' s statement follows a Straits Times report on Nov 25 which noted that the consortium was prepared to cover the break fee if shareholders reject the Keppel scheme.

 

Keppel announced its proposed acquisition of SPH on Aug 2, but Cuscaden made a surprise rival bid on Oct 29.

 

Keppel then improved its terms on Nov 9, with its final offer of $2.351, comprising 86.8 cents per SPH share plus 0.596 of a Keppel Reit unit and 0.782 of an SPH Reit (real estate investment trust) unit.

 

The Cuscaden Peak offer has two options: $1.602 cash and 0.782 of an SPH Reit unit per share through a distribution in-specie, or an all-cash deal of $2.36 a share.

 

SPH has to pay a break fee of $34 million to Keppel, equivalent to around 1 per cent of the aggregate consideration of Keppel' s initial offer, if a competing offer becomes effective or unconditional.

 

The ST report on Nov 25 had stated that SPH shareholders would be called back to vote on the Cuscaden scheme a week or two after they vote on the Keppel scheme, and that Cuscaden will complete the deal by February 2022.

 

Cuscaden said on Wednesday that regulatory and court approvals may result in the meeting being convened at a date beyond a week or two after the Keppel scheme meeting.

 

It is unclear when shareholders will cast their verdict on the competing schemes.

 

A vote on the Keppel offer was pencilled in for Dec 8. But that has now been delayed, which, in turn, will delay any meeting on the Cuscaden scheme.

 

THE 8-week restriction clause imposed by Keppel Keppel Corp: BN4 -1.87% does not apply if either Keppel or Singapore Press Holdings (SPH) SPH: T39 0% shareholders vote against the former' s proposed acquisition at the relevant extraordinary general meetings.

 

This is also the case if Keppel exercises its switch option where the group makes a voluntary cash offer for SPH, Cuscaden Peak said on Friday (Nov 26) in response to questions from the Securities Investors Association (Singapore) (Sias).

 

In its announcement, the consortium - comprising Hotel Properties (HPL), CLA Real Estate Holdings and Mapletree Investments - said its proposed scheme meeting " should be able to proceed expeditiously" without the 8-week restriction should any of the abovementioned events take place.

 

It added that SPH shareholders should therefore vote against the Keppel scheme for Cuscaden Peak' s competing offer to be brought forward.

 

" Cuscaden is committed to achieving successful completion of the Cuscaden scheme and will continue to work closely with SPH towards the convening of the Cuscaden scheme meeting as soon as circumstances allow, in the interests of SPH shareholders," stated the consortium.

 

The 8-week restriction comes as part of SPH' s implementation agreement with Keppel, which prevents the former' s shareholders from taking any action to hold alternative scheme meetings within 8 weeks from the date of Keppel' s scheme meeting.

 

HPL group executive director Christopher Lim, one of the backers of Cuscaden, on Nov 21 said the consortium viewed this restriction as " against the interests of SPH shareholders" .

 

Lim also stated that Cuscaden remained on track for an indicative transaction completion by Feb 2022, pending clearance from the Foreign Investment Review Board of Australia.

 

SPH, which publishes The Business Times, views Cuscaden' s revised offer of S$2.40 a share as superior to Keppel' s. The latest offer comprises S$1.602 cash and 0.782 of an SPH Reit unit through a distribution-in-specie by SPH.

 

The group has called for shareholders to vote down Keppel' s proposal, which entails S$2.351 per share consisting of S$0.868 per share in cash, 0.596 of a Keppel Reit unit and 0.782 of an SPH Reit unit.

CUSCADEN Peak, a group backed by Hotel Properties (HPL) HPL: H15 0%, property magnate Ong Beng Seng and 2 Temasek-linked units CLA and Mapletree, has secured most of the regulatory approvals needed for its takeover offer for Singapore Press Holdings (SPH) SPH: T39 -0.42%, further cementing its advantage in a bidding contest for the media company' s property assets.

 

The group on Sunday (Nov 21) said it received regulatory approvals from the Monetary Authority of Singapore (MAS) and the Info-Communications Media Development Authority (IMDA). It will still need to get clearance from the Foreign Investment Review Board (FIRB) of Australia.

 

" We remain on track for an indicative transaction completion by February 2022," said Christopher Lim, group executive director of HPL, one of the backers of Cuscaden Peak.

 

He added: " Unfortunately, SPH is restricted by its Implementation Agreement with Keppel Keppel Corp: BN4 -0.19% from taking any action to hold the Cuscaden Scheme Meeting within 8 weeks from the date of the Keppel Scheme Meeting. Cuscaden views this restriction as against the interests of SPH shareholders."

 

The green light from regulators widens Cuscaden' s edge over its rival Keppel Corp, which is refusing to budge on its offer. Keppel earlier said it had obtained 

requisite regulatory approvals from the FIRB of Australia and MAS, giving it an advantage.

 

" Even if a competing offeror is able to obtain the requisite approvals, it would take some time," a spokesperson said then.

 

Under the terms of the latest offer on Nov 15, Cuscaden is willing to pay S$2.40 a share for SPH, comprising S$1.602 cash and 0.782 of an SPH Reit unit through a distribution-in-specie by SPH. Shareholders can also opt to take an all-cash option of S$2.36 per share.

 

That is up from an earlier offer of S$2.10 a share in cash, to compete with Keppel' s initial bid of S$2.099 in cash and units of both Keppel Reit and SPH Reit. If successful, a deal would costs Cuscaden S$3.9 billion.

 

SPH, which publishes The Business Times, has said Cuscaden' s offer is superior and has called for shareholders to vote down Keppel' s proposal.

Keppel is offering up to S$2.351 per share, consisting of S$0.868 per share in cash, 0.596 of a Keppel Reit unit and 0.782 of an SPH Reit unit. It said the offer is final and irrevocable.