IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>Cuscaden is offering an all-cash offer of S$2.36 or cash &amp; units offer to comprise S$1.602 in cash and 0.782 <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a> units per SPH share (worth S$2.40).</li>
<li>SPH independent directors preliminarily recommend to shareholders to vote against the Keppel scheme and vote in favour of the Cuscaden scheme. Cuscaden’s offer will be implemented by February 2022. </li>
<li>Cuscaden’s revised offer options are attractive in the context of SPH’s long-term multiples/share prices and <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a>’s final offer. Cuscaden’s revised offer seems like a done deal. </li>
</ul>


Cuscaden is offering an all-cash offer of S$2.36 or cash &amp; units offer to comprise S$1.602 in cash and 0.782 SPH REIT (SPHREIT SP) units per SPH share (worth S$2.40).
SPH independent directors preliminarily recommend to shareholders to vote against the Keppel scheme and vote in favour of the Cuscaden scheme. Cuscaden’s offer will be implemented by February 2022. 
Cuscaden’s revised offer options are attractive in the context of SPH’s long-term multiples/share prices and Keppel Corp (KEP SP)’s final offer. Cuscaden’s revised offer seems like a done deal. 


Cuscaden’s Revised Offer Options to End the Battle for SPH

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Last Week in Event SPACE: Softbank, Sydney Airports, SPH, SingTel, Oil Search, Japex/Inpex, Nippo

Research from SooChow CSSD Capital Markets (Asia), SCCM Asia Research

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Headquartered in Singapore, SooChow CSSD Capital Markets (Asia) is an investment bank focusing on emerging growth companies across Asia, providing a full suite of investment banking services, including corporate finance, mergers and acquisitions advisory, equity capital markets, institutional equities sales and trading and equities research.

SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<h2>Singapore  </h2>SREITs results in a glance (see detailed spreadsheet and calendar attached)<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/912/original/image_9006419321636552670499.png?1636552673" class="editor-image img-responsive" data-smartkarma-image-id="240912"></figure><h3><a href="https://www.smartkarma.com/entities/ec-world-reit" target="_blank" data-smartkarma-citation="entities:22842" rel="noopener">EC World Reit (ECWREIT SP)</a> 3Q21 DPU +19.7% YoY; Driven largely by partial DI release and lower retention ratio</h3><ul><li>3Q21 revenue and NPI grew by 10.9% and 9.4% YoY to S$31.6m and S$28.6m, respectively, mainly due to positive straight-line adjustment and strengthening of RMB by 5.2% YoY. 9M21 revenue and NPI grew faster at 16.6% and 15.2% YoY to S$93.5m (78.2% of BB est.) and S$84.2m, respectively, given the absence of one-off rental rebates. On a QoQ basis, revenue and NPI also increased by 1.2% and 2.4% YoY, respectively</li></ul>

Singapore  SREITs results in a glance (see detailed spreadsheet and calendar attached)EC World Reit (ECWREIT SP) 3Q21 DPU +19.7% YoY; Driven largely by partial DI release and lower retention ratio3Q21 revenue and NPI grew by 10.9% and 9.4% YoY to S$31.6m and S$28.6m, respectively, mainly due to positive straight-line adjustment and strengthening of RMB by 5.2% YoY. 9M21 revenue and NPI grew faster at 16.6% and 15.2% YoY to S$93.5m (78.2% of BB est.) and S$84.2m, respectively, given the absence of one-off rental rebates. On a QoQ basis, revenue and NPI also increased by 1.2% and 2.4% YoY, respectively

Travis Lundy

There is a recent history here. <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> had, after somewhat lackluster results in some of its divisions and spreading itself a bit thin in others, and losing money in the media division decided this spring to restructure itself by spinning out the media business (<a href="https://www.smartkarma.com/insights/singapore-press-own-time-own-target-restructuring-lor-come-i-clap-for-you" target="_blank" data-smartkarma-citation="insights:51141" rel="noopener">Singapore Press Own Time Own Target Restructuring Lor... (Come I Clap For You)</a>).After that was announced, <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> had the bright idea it would like to take over the real estate business for itself, and on 2 August they announced a deal which seemed more in Keppel's interest than SPH Shareholders' interests (<a href="https://www.smartkarma.com/insights/alamak-sph-restructuring-restructured-as-keppel-bo-jios-sph-holders" target="_blank" data-smartkarma-citation="insights:55370" rel="noopener">Alamak! SPH Restructuring Restructured as Keppel Bo Jios SPH Holders</a>). The Keppel Consideration was some cash, a distribution of <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a> from SPH, and a <a href="https://www.smartkarma.com/entities/keppel-reit" target="_blank" data-smartkarma-citation="entities:192:1" rel="noopener">Keppel REIT (KREIT SP)</a> units - not far from one-third each. Six weeks later <a href="https://www.smartkarma.com/insights/sph-shareholders-approve-spinoff-there-s-still-a-spread-to-earn" target="_blank" data-smartkarma-citation="insights:57504" rel="noopener">SPH Shareholders approved the spinoff but there was still a spread to earn</a>.On October 29, when the Keppel Consideration was trading at S$2.09 per SPH share while the shares were trading at S$1.99/share, a new entity called Cuscaden Peak Pte. Limited, backed by Hotel Properties Limited, Capitaland, and Mapletree Investments - two Temasek-backed entities - came out and proposed a bid of S$2.10/share in cash plus the S$0.03 dividend to come, topping the Scheme Consideration in the <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> Offer. <a href="https://www.smartkarma.com/insights/sph-lobang-holders-so-shiok-bidders-so-kiasu-this-may-not-be-the-end" target="_blank" data-smartkarma-citation="insights:59725" rel="noopener">SPH Lobang - Holders So Shiok, Bidders So Kiasu. This May Not Be The End.</a>The same day Keppel said it would think about how to respond. The shares bounced, and traded "through terms" with Keppel's terms jumping as some arbitrageurs bought back their REIT baskets. In the last and a followup <a href="https://www.smartkarma.com/insights/sph-update-keppel-sph-reit-chain-offer-and-cuscaden-strategy" target="_blank" data-smartkarma-citation="insights:59962" rel="noopener">SPH Update: Keppel, SPH REIT Chain Offer, and Cuscaden Strategy</a> I suggested Keppel needed to up the cash component to clearly win this deal. This morning, Keppel did - raising the cash component by S$0.20/share, making the value at yesterday's close equivalent to S$2.35 per SPH share. Keppel was not lepaking!So swee!<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/739/original/Screenshot+2021-11-10+at+7.27.01+AM.png?1636501815" class="editor-image img-responsive" data-smartkarma-image-id="240739"></figure></section>S$2.35 is higher than the old Keppel Offer Consideration had ever traded, and is considerably more attractive to SPH shareholders. They should feel less bo jio'd. I think the entry of Cuscaden has served its purpose. This should be done, but should Cuscaden want to do so, it now has its work cut out for it.

There is a recent history here. Singapore Press Holdings (SPH SP) had, after somewhat lackluster results in some of its divisions and spreading itself a bit thin in others, and losing money in the media division decided this spring to restructure itself by spinning out the media business (Singapore Press Own Time Own Target Restructuring Lor... (Come I Clap For You)).After that was announced, Keppel Corp (KEP SP) had the bright idea it would like to take over the real estate business for itself, and on 2 August they announced a deal which seemed more in Keppel's interest than SPH Shareholders' interests (Alamak! SPH Restructuring Restructured as Keppel Bo Jios SPH Holders). The Keppel Consideration was some cash, a distribution of SPH REIT (SPHREIT SP) from SPH, and a Keppel REIT (KREIT SP) units - not far from one-third each. Six weeks later SPH Shareholders approved the spinoff but there was still a spread to earn.On October 29, when the Keppel Consideration was trading at S$2.09 per SPH share while the shares were trading at S$1.99/share, a new entity called Cuscaden Peak Pte. Limited, backed by Hotel Properties Limited, Capitaland, and Mapletree Investments - two Temasek-backed entities - came out and proposed a bid of S$2.10/share in cash plus the S$0.03 dividend to come, topping the Scheme Consideration in the Keppel Corp (KEP SP) Offer. SPH Lobang - Holders So Shiok, Bidders So Kiasu. This May Not Be The End.The same day Keppel said it would think about how to respond. The shares bounced, and traded "through terms" with Keppel's terms jumping as some arbitrageurs bought back their REIT baskets. In the last and a followup SPH Update: Keppel, SPH REIT Chain Offer, and Cuscaden Strategy I suggested Keppel needed to up the cash component to clearly win this deal. This morning, Keppel did - raising the cash component by S$0.20/share, making the value at yesterday's close equivalent to S$2.35 per SPH share. Keppel was not lepaking!So swee!S$2.35 is higher than the old Keppel Offer Consideration had ever traded, and is considerably more attractive to SPH shareholders. They should feel less bo jio'd. I think the entry of Cuscaden has served its purpose. This should be done, but should Cuscaden want to do so, it now has its work cut out for it. 

Huat Ah! SPH Holders So Shiok, Keppel (So Kiasu!) Adds 20 Cents - Swee!

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<div>On 30 March, <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> announced that it was undergoing a strategic review to consider options for its various businesses. On 6 May, the company announced that it would be transferring its media business to a not-for-profit entity.</div><div>
Then, on 2 August, <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> announced that it was proposing to acquire <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> ex the media business and then delist and privatise SPH. Under the terms of the Scheme, for each share of <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> held, shareholders will receive cash of S$0.668, 0.596 units of <a href="https://www.smartkarma.com/entities/keppel-reit" target="_blank" data-smartkarma-citation="entities:192:1" rel="noopener">Keppel REIT (KREIT SP)</a> and 0.782 units of <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a>, valuing SPH at S$2.0987/share. With a large part of the value tied to other listed stocks, the amount that SPH shareholders would receive kept moving around.
On 29 October, Cuscaden Peak proposed to acquire <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> in an all cash deal at S$2.10/share. That compared to a price of S$1.99/share for SPH at the close on 28 October and an equivalent value of S$2.0861/share from the Keppel offer.
On 1 November, <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> closed at S$2.12/share, higher than the Cuscaden offer. But with the rally (and short covering) in <a href="https://www.smartkarma.com/entities/keppel-reit" target="_blank" data-smartkarma-citation="entities:192:1" rel="noopener">Keppel REIT (KREIT SP)</a> and <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a>, the S$2.12/share price was a discount to the value of S$2.1548/share from the Keppel deal.
Last evening, just before the stroke of midnight, <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> announced that it was making a compelling final offer of S$2.351/share for <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a>, 12% higher than the initial offer and the result of a S$0.2/share increase in the cash consideration. The S$2.351/share value could move lower on a drop in <a href="https://www.smartkarma.com/entities/keppel-reit" target="_blank" data-smartkarma-citation="entities:192:1" rel="noopener">Keppel REIT (KREIT SP)</a> and <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a>, but is likely to remain higher than the Cuscaden offer. The revised scheme consideration will not be adjusted by the S$0.03/share final dividend.
We do not see Cuscaden increasing their cash offer to match the Keppel offer. Even if they do, an increase in the stock prices of <a href="https://www.smartkarma.com/entities/keppel-reit" target="_blank" data-smartkarma-citation="entities:192:1" rel="noopener">Keppel REIT (KREIT SP)</a> and <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a> could take the value of the Keppel offer even higher.
</div>

On 30 March, Singapore Press Holdings (SPH SP) announced that it was undergoing a strategic review to consider options for its various businesses. On 6 May, the company announced that it would be transferring its media business to a not-for-profit entity.
Then, on 2 August, Keppel Corp (KEP SP) announced that it was proposing to acquire Singapore Press Holdings (SPH SP) ex the media business and then delist and privatise SPH. Under the terms of the Scheme, for each share of Singapore Press Holdings (SPH SP) held, shareholders will receive cash of S$0.668, 0.596 units of Keppel REIT (KREIT SP) and 0.782 units of SPH REIT (SPHREIT SP), valuing SPH at S$2.0987/share. With a large part of the value tied to other listed stocks, the amount that SPH shareholders would receive kept moving around.
On 29 October, Cuscaden Peak proposed to acquire Singapore Press Holdings (SPH SP) in an all cash deal at S$2.10/share. That compared to a price of S$1.99/share for SPH at the close on 28 October and an equivalent value of S$2.0861/share from the Keppel offer.
On 1 November, Singapore Press Holdings (SPH SP) closed at S$2.12/share, higher than the Cuscaden offer. But with the rally (and short covering) in Keppel REIT (KREIT SP) and SPH REIT (SPHREIT SP), the S$2.12/share price was a discount to the value of S$2.1548/share from the Keppel deal.
Last evening, just before the stroke of midnight, Keppel Corp (KEP SP) announced that it was making a compelling final offer of S$2.351/share for Singapore Press Holdings (SPH SP), 12% higher than the initial offer and the result of a S$0.2/share increase in the cash consideration. The S$2.351/share value could move lower on a drop in Keppel REIT (KREIT SP) and SPH REIT (SPHREIT SP), but is likely to remain higher than the Cuscaden offer. The revised scheme consideration will not be adjusted by the S$0.03/share final dividend.
We do not see Cuscaden increasing their cash offer to match the Keppel offer. Even if they do, an increase in the stock prices of Keppel REIT (KREIT SP) and SPH REIT (SPHREIT SP) could take the value of the Keppel offer even higher.


Singapore Press Holdings (SPH SP) - Keppel Back in Pole Position

Singapore

Keppel Corporation Limited's core businesses are offshore and marine, infrastructure, property investment and development, telecommunications and transportation, energy, and engineering.

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Keppel Corp (KEP SP)

Cuscaden’s Revised Offer Options to End the Battle for SPH

Cuscaden is offering an all-cash offer of S$2.36 per share or cash & units offer to comprise S$1.602 in cash and 0.782 SPH REIT units per SPH share...

Arun George

Last Week in Event SPACE: Softbank, Sydney Airports, SPH, SingTel, Oil Search, Japex/Inpex, Nippo

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

ASEAN Builder's Scoop (10Nov21)

ECWREIT driven by DI release and lower retention; SHG privatization offer; PROP 3Q21 earnings more than doubled; Oct21 condo resale prices rose...

SCCM Asia Research

Huat Ah! SPH Holders So Shiok, Keppel (So Kiasu!) Adds 20 Cents - Swee!

Alamak! Huat Ah! Keppel comes back with a strong, but FINAL, overbid, adding S$0.20/share to the consideration. SPH may continue to engage with...

Travis Lundy

Singapore Press Holdings (SPH SP) - Keppel Back in Pole Position

Keppel has increased the cash component of its earlier offer to top Cuscaden's offer by 12%. We think it unlikely that Cuscaden makes an all-cash...

Brian Freitas

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