BARRIER Four months after the mammoth merger led by Temasek Holdings was completed and cleared by the heavyweight sector CapitaLand, the state-owned investment firm in Singapore is shaking things up again – with a surprise $ 4 billion mid-range Corp. partial bid of $ Kep in its portfolio.
Keppel shares trading halted on Monday, it was announced that Thamesek, a 20.5 per cent majority shareholder in the conglomerate, had partial bid to find an additional 30.55 per cent stake in Keppel for 7.35 US dollars. cash dollars, a premium of 26 cents or $ 1.51 above the last traded price of $ 5.84; the bid is also 21% above the average price per quarterly weighted volume.
Larger analysts see Thamesek's bid to gain control of Kepel through wholly-owned Kyanite Investment Holdings "reasonable," as the bid price is close to their fair value estimates of Keppel shares – more more given the one-year contract deadline from now on (21 October 2020), as prerequisites include getting kiwi from domestic and foreign regulators.
Adrian Lo of UOB Kayan said: "It seems to be fair because it's 3.5 percent lower than our $ 7.61 target price for Kepel."
Another analyst said: "The gesture of this deal is long. Thamesac would not want to be tied to a very high price should the share price deteriorate further. The supply cannot be reduced, but on the other hand, if needed, it can be sweetened later. "
Temasek said he did not intend to remove or privatize Kepel; it will remain listed on the Singapore Stock Exchange. He added that the bid price gives Keppel shareholders the opportunity to earn some or potentially all of their conglomerate investment.
A key part of Monday's announcement is that, following the successful closing of the bid, Thamesek said he will work with the Kepel board on a "comprehensive strategic review" to create sustainable shareholder value.
He added that he may propose new directors to the Keppel Board of Directors to facilitate the review, even though Thamesek has a long-standing management model not to be involved in the operating or business decisions of its portfolio companies; believes it rests with the appropriate boards and management teams.
Analysts have not spent a single second guessing what the review could potentially show.
KGI Securities analyst Eloel Ng said: "In our opinion, this is a prelude to the much-needed consolidation of Singapore's offshore and offshore (O&M) sector. consolidation ”
For years, the excitement over the possible merger between Singapore's Keppel O&M and Sembcorp Marine has created excitement in the market; This is especially so because the huge shipyards elsewhere, especially in China and South Korea, have also faced competition to avoid rivals and boost their pricing power.
Except for a brief attempt in 2001 by Capel and Semborp, such a union did not happen.
However, with Seth Brazil out of the way following the recent settlement agreement by both Keppel and SembMarine, and given K&P's underperformance in O&M business, analysts say such a merger seems more likely.
Mr Lo, Mr Lo, Karchian said: "Offshore and the marine cycle are currently in recession. Jack-ups and half-rows are not being ordered at the same pace as before, although Keppel managed to collect decent orders for offshore renewable energy sources and means of production.
"However, margins are rising to the bottom."
Other industry insiders say the review could eventually include more than just Keppel's O&M assets.
US law firm Gibson Dunn & Croucher, Robson Lee, said Capel is much more than an offshore and maritime company, "that's why anything is possible."
The company has significant assets (with operations in Australia, China, India, Indonesia, Singapore, Vietnam and elsewhere); also owns M1.
"Thamesek may also want to use the M1, as there is an opportunity to expand and deepen the paste during the 5G shift," Mr Lee added.
To many observers, Thamesek's announcement that Kepel's business activities will be reviewed not only signals a necessary refresh of the company's direction, but that Thamesek is careful to work some of its portfolio assets better.
OHBF Investment Research chief Carmen Lee said: "Overall, we see this as a positive development, as Thamesek takes a proactive approach in reviewing its portfolio and investments over the long term."
Earlier this year, CapitaLand announced the acquisition of all shares in two Ascendas-Singbridge (ASB) subsidiaries of Thamesek Holdings, in the process of creating the largest diversified property in Asia. The $ 11 billion deal was completed at the end of June.
Last month, CLSA in a report noted that Thamesek appeared to be slowing its investment pace and stepping up efforts to optimize its assets last year, in part to boost returns in Singapore's stock market.
Keppel stock trading was halted on Monday and resumes on Tuesday.
The contract's next best proxy, shares of Sam Marin, reached 12% or 14 cents in Singapore to end on Monday at $ 1.34, prompting a call from the bourse operator; Sembcorp Industries (SCI) shares jumped 21 cents in Singapore or over 10 percent to $ 2.29.
These two counters were also among the most active of the day, with 29 million shares valued at $ 37 million made for Sam Marin and 24 million shares valued at S 53 million for SFI.
Mr NG of KGI added: “The merger between SembMarine and Keppel O&M will remove the key to SCI's 2015 share price upgrade, mainly because SembMarine uses SCI's balance sheet, while not offering a decent return on equity. “.