Keppel Land

Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
KepLand shares surge on takeover bid

Melissa Tan

The Straits Times

Thursday, Jan 29, 2015


Shares of property developer Keppel Land surged yesterday after a takeover bid from its parent Keppel Corp was announced last Friday.

KepLand shot up by 25 per cent, or 90 cents, to $4.55, its highest since April 2011. It was one of the most traded stocks on the local bourse, with 43.9 million shares changing hands.

Conglomerate KepCorp rose as well, up six cents to $8.16 on 25.4 million shares traded.

Both stocks resumed trading yesterday after calling a halt last Wednesday morning.

Analysts said yesterday that KepLand shareholders should accept the buyout offer,which could cost KepCorp around $3.2 billion.

KepCorp is offering a two-tier price for the KepLand shares it does not already own: A base one of $4.38 apiece, and $4.60 if its buyout succeeds. This higher price values KepLand at around $7.1 billion.

This offer price includes KepLand's proposed 14-cent dividend for the financial year that ended on Dec 31.

Subtracting the dividend, the higher bid would go down to $4.46, which is 22 per cent over KepLand's close at $3.65 last Tuesday.

"With the near-term softness in the property market, the premium is pretty attractive to Keppel Land shareholders," said Phillip Securities analyst Benjamin Ong.

OCBC Investment Research analyst Eli Lee added in a report yesterday: "Given currently uncertain outlooks for KepLand's core development businesses in Singapore and China, we believe this is a fair enough offer and allows minority shareholders to exit at a share price above the last 36-month high."

However, analysts were slightly more cautious on how the takeover would affect KepCorp, which owns about 54.6 per cent of mainboard-listed KepLand.

KepCorp is paying a hefty price to take KepLand private, but the benefits of the move may not be immediately obvious, they said, adding that the uncertainty could affect its share price in the near future.

"Given the rich price offered for KepLand and that synergies for the combination may not be immediately apparent, there may be some near-term weakness in KepCorp's share price," OCBC Investment Research said in a note yesterday.

"We incorporate a higher conglomerate discount of 10 per cent (from 5 per cent previously) for the privatisation of KepLand... our fair value estimate (for KepCorp) drops from $9.89 to $9.14."

The value of a diversified company may often be weighed down by a so-called "conglomerate discount" on the sum of its parts.

Maybank Kim Eng also said in a report that although the soft property market may make it cheaper to privatise KepLand, "it also works against crystallising value in the near term".

"While KepCorp has hinted that making further attractive property investments may be easier with a fully controlled KepLand and lower capital costs, no concrete plans were communicated," it said. Its target price for KepCorp is $8.60.

However, analysts said KepCorp still had potential to rise in the longer term.

KepCorp chief executive Loh Chin Hua told a briefing last Friday that the conglomerate has made major moves in the past that the market "did not fully appreciate" at the time.

One example he cited was the development of the site of its old shipyard at Keppel Bay into private condominiums.

It had to pay a development charge of about $1 billion to convert the site to residential use, but the properties there are now a source of good returns, he said.

"Even now, every unit we sell in Keppel Bay goes straight to our bottom line because costs are quite low," he said.

This article was first published on January 27, 2015.

http://business.asiaone.com/news/kepland...keover-bid
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
Reply
Interesting move by BlackRock...........buying in at 4.54.......
_______________________________________________________________________________________________________________

BlackRock, world's largest asset manager, holds 3.1% of Keppel Land shares

Published on Jan 29, 2015

SINGAPORE - Keppel Corporation disclosed on Thursday (Jan 29) that BlackRock Inc, an associate of Keppel Corp, now holds some 48.05 million shares in Keppel Land. Its holding represents about 3.1 per cent of the total issued shares in Keppel Land as at Jan 28, 2015, Keppel Corp said. BlackRock is an associate of Keppel Corp by virtue of the fact that it holds 5 per cent or more of Keppel Corp shares. As such, BlackRock is required to disclose its dealings in shares during the offer period. Keppel Corp last Friday launched an offer to acquire all the issued ordinary shares in Keppel Land and take it private.

http://www.straitstimes.com/news/busines...shares-201

http://infopub.sgx.com/FileOpen/Keppel_C...eID=333271
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
Reply
3.1% not enough to block the deal....blackrock needs more bullets...
Reply
Don't count on these mutual fund mgrs. they are a ineffective bunch when
it comes to fighting privatisation. Main thing is they cannot hold unlisted shares.
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
Reply
(30-01-2015, 03:24 PM)opmi Wrote: Don't count on these mutual fund mgrs. they are a ineffective bunch when
it comes to fighting privatisation. Main thing is they cannot hold unlisted shares.


Depending on where the Mutual funds are domiciled – my guess is not all jurisdictions prohibit mutual funds from investing in unlisted stocks.

Besides, Blackrock is more than a mutual fund manager………….being a global Asset Manager that manages mutual funds, hedge funds, private equity funds etc, they certainly are accessible to other source of funds without such constraints…………

Asset Managers don’t fight privatization for the sake of fighting it………..“For or against” privatization – it could just be a mean to an end……………………the “end” (ultimate objective) is still to make money………………….
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
Reply
I think it is done deal. So I have sold all my kepland at 4.54 to market. After all it is just some 1.6% over i think if include broker fee.

Why? Because it may take a long time before they come for your share and in the mean times there is opportunity cost else where. It is going to stay at this 4.5X for a long time, no worth waiting just for 1% over gain.

I am using the proceed from the sale on some other counter will be a better choice for me.
Reply
(04-02-2015, 12:58 PM)yewkim Wrote: I think it is done deal. So I have sold all my kepland at 4.54 to market. After all it is just some 1.6% over i think if include broker fee.

Why? Because it may take a long time before they come for your share and in the mean times there is opportunity cost else where. It is going to stay at this 4.5X for a long time, no worth waiting just for 1% over gain.

I am using the proceed from the sale on some other counter will be a better choice for me.

Come to think of it, if blackrock will buy some few % and hoping that those retailer who reject the offer will together make up of more than 10%, there is chances that the takeover may fail.
Reply
Does anyone know what happens to the shareholders who still hold on to the shares even after Section 213 © act?

They remain shareholders but because it is unlisted , they can no longer sell their shares.

Do they still get shareholder annual reports, any dividends etccc?
Reply
See our discussions a month ago on the Keppel thread Smile

Legally nothing has changed because it will still be governed by Companies Act as a public company if it has >50 shareholders. So yes AGM, dividends declared will still be entitled.

But it will no longer be listed and goes by SGX rules. You can still sell your shares OTC if u can find a buyer with an agreed price and pay the relevant stamp fees
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

Think Asset-Business-Structure (ABS)
Reply
^^ Same fate as SingLand. I still have some odd lot.
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
Reply


Forum Jump:


Users browsing this thread: 7 Guest(s)