Keppel Limited

[weijian]

Is it renewable energy or is it 5G?

Current price: $6.70
Offer price: $7.35 
Potential gain within next 12 months: 65cents
Get paid while you waiting aka dividend: about 23cents 

hi chialc88,
i hope you can stick to 1 nickname to post. We don't allow 2 nicknames - Talking from a Moderator's standpoint.

Now back to Keppel Corp's current trading prices...I thought i had see it wrongly when i saw such a huge gap between current trading price and offer price this morning - so i quickly scan through the document and saw 2 things below:

(1) Point 3.1.5 actually says that Offerer has the right to reduce the offer price based on dividends received after the announcement date. The announcement date was yesterday.

(2) As this is a partial offer, not all the shares can be tendered. Every shareholder is given a minimum amount they can tender (Point 3.5) but it seems like if one particular shareholder wants to tender more than their "minimum quota", this is contingent upon others not tendering their minimum amount. Offerer has an absolute total amount of shares that they will buy.

Offer announcement: https://links.sgx.com/FileOpen/Pre-Condi...eID=582384

[Ray168]

Is it renewable energy or is it 5G?

Current price: $6.70
Offer price: $7.35 
Potential gain within next 12 months: 65cents
Get paid while you waiting aka dividend: about 23cents 

hi chialc88,
i hope you can stick to 1 nickname to post. We don't allow 2 nicknames - Talking from a Moderator's standpoint.

Now back to Keppel Corp's current trading prices...I thought i had see it wrongly when i saw such a huge gap between current trading price and offer price this morning - so i quickly scan through the document and saw 2 things below:

(1) Point 3.1.5 actually says that Offerer has the right to reduce the offer price based on dividends received after the announcement date. The announcement date was yesterday.

(2) As this is a partial offer, not all the shares can be tendered. Every shareholder is given a minimum amount they can tender (Point 3.5) but it seems like if one particular shareholder wants to tender more than their "minimum quota", this is contingent upon others not tendering their minimum amount. Offerer has an absolute total amount of shares that they will buy.

Offer announcement: https://links.sgx.com/FileOpen/Pre-Condi...eID=582384

I have one doubt and hope someone can enlightening me. 

Why Temasek does not buy from open market below $6? 

Why Temasek wants to pay $7.35?

[specuvestor]

buying above 30% will be an MGO. Apparently Temasek just want 51% control of Keppel to restructure.

[kikababoo]

Like what specuvestor said. Theres no pt for Temasek to buy slowly on the market. They will have to disclose since they r key shareholder with 20+ percent, means every1 will know, then they ll drive up the price unnecessarily. And also, once they reach 30%, buying anymore trigger MGO, which means buying 100%, again pointless.

The market is pricing keppel quite fairly now with this tender offer. Temasek owns 20%, they want to buy another 30%. So 30%/80%, means about 40% of tendering power assuming pro-rata share of tendering (which is unlikely for some larger/key strategic shareholder). Price in some time value of money, optionality risks, mid 6 is about right for now.

[specuvestor]

As expected

(Bloomberg) -- Temasek will explore merging Keppel with rival Sembcorp Marine to create an offshore rig builder large enough to take on consolidating shipbuilding giants in China and South Korea, WSJ reports, citing unidentified people familiar with the matter.
Sembcorp Marine could be privatized if that doesn’t work, one unnamed person involved in the matter is quoted as saying
NOTE: Temasek currently owns 49.5% of Sembcorp Marine parent Sembcorp Industries and would own 51% of Keppel Corp after acquiring shares

[holymage]

Interesting. Things always get interesting when the industry consolidates.

[Shiyi]

The market price is much lower than the offer price, which is understandable.
Does anybody know if Temasek is allowed to buy in the open market?

[Squirrel]

The market price is much lower than the offer price, which is understandable.
Does anybody know if Temasek is allowed to buy in the open market?

I believe they can't buy shares in the open market while seeking approval for the partial offer.

[weijian]

The market price is much lower than the offer price, which is understandable.
Does anybody know if Temasek is allowed to buy in the open market?

I believe they can't buy shares in the open market while seeking approval for the partial offer.

Went to verify this. From page110 onwards in the Singapore Takeover code 16.4 - they cannot buy 6 months before announcement (16.4b)(i), between announcement and approval date (16.4b)(ii), and also 6 months after close of the partial offer (16.4b)(iv).

Nonetheless from (16.4b)(iii), seems like they will be able to buy from the open market once they gotten the approval.

Spore Takeover code https://www.mas.gov.sg/-/media/MAS/resou...1F290D7405

[¯|_(ツ)_/¯]

@WeiJian (Moderator) - noted. 

To tell my story.
I was out and the only way for me is to post using my previous nick.
Well, I did try very hard not to post and I did it!
Now, I'm back from Korea holiday so just start again.

---

Back to Keppel.
For the record, it's currently selling at $6.94.

2 things was in my mind which prompted me to posts in this thread.
A) Go or no-go aka whether this offer will lapse or not.
B) If GO, whether all my shares will be sold to Temasek or only partial?

This was what I was thinking:
A) Question on For Go, there will be 3 scenario:
A1) Offerer already gotten green light (plus 30% supporting vote)
This means that the deal is almost done and we should just proceed to B) aka % of share offerer will buy from me
This is a possible scenario as Temasek likely will had already done it's calculation before the announcement.

A2) Offerer did not already gotten green light (nor 30% supporting vote)
However, they had a plan on getting these green light (and plan to ensure 30% supporting vote).
They will just execute the plan and after 1 years, all should be cleared for the GO.
This is a likely scenario and things will be clearer as days goes by on what are the strategies that offerer put in place to ensure green light (and 30% supporting vote).
We just need to follow Keppel announcement closely to see these cards dish out from time to time.

A3) Offerer did not know whether they will get green light (and also whether they can secure 30% supporting vote)
This is not likely.
I mean, how could this happen?
So rookie meh?
After a quick check, someone will wake up and start to be serious.
Action plan, contingency etc will be put in place and details will be monitored closely.
Simply put, FAILURE is not an option!

---

After I can see the GO, part B) will kick in to confirm the buying strategy.
B1) If I only have 100 shares (yes, I literally means 100 shares)
In this case, I believed that Temasek will allocate and buy all 100 shares from me (instead of says 30% aka 30 shares).
This is quite obvious as 70 shares is really very difficult for me to sell.
Why did Temasek wanted to create such a problem for me?
It's suppose to be a happy things and not causes more issues for Keppel shareholders.
Anyway, my conclusion is all my 100 shares will be taken in by Temasek.

B2) What if I had slightly more than 100 shares?
I am not sure what is the cut off number aka optimum number of shares to own.
However, I think that so long as I'm not greedy, there is a high chance that Temasek will allocate and buy 100% of my shares.
For those with large number of shares, then Temasek likely will allocate/buy 30%.

In any case, enjoy while the music is still playing.
Will you?


More importantly, at that time, I really think that Keppel at $6.70 is a good buy.
What do you think?

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感恩