,Singapore

Keppel, SPH merger a good deal for both: UOB Kay Hian

Keppel is set to fully acquire SPH’s non-media businesses by end-December if shareholders approve.

Keppel’s proposed acquisition of SPH, excluding the latter’s media business, would benefit both companies, according to a brokerage report from UOB Kay Hian.

In our view, Keppel’s proposed acquisition of SPH is a good deal for its shareholders as it gives the company exposure to assets that it currently does not have, especially the Purpose Built Student Accommodation, whilst expanding its foothold in its three key business segments – asset management, urban development, and connectivity. Asset management, in particular, could witness a 27% increase in assets under management to c.S$47b,” UOB Kay Hian Analyst Adrian Loh said for Keppel Corp.

UOB Kay Hian Analyst Lucas Teng added that SPH should accept Keppel’s offer.

“The offer price of S$2.099/share is approximately 5% above our previous target price of S$2, which appears to be fair. We think valuation could be slightly higher, but not by much,” Teng said.

He added that SPH’s student accommodation assets in the UK would be appealing to Keppel, as it is resilient to the effects of COVID-19 due to the rising domestic student population.

The acquisition would also avoid a scenario where SPH’s assets are cherry-picked, leaving the company with debt and the risk of monetising what is left.

The deal is set for completion by end-December, subject to the approval of shareholders.

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

HongKongLand had the most growth for the day.
It surpassed the Bloomberg consensus estimate of 14.5%.
The agreement aims to grow tourism and economic activities as borders reopen. 
It will also enter a loan agreement worth $210.6m.
The acquisition will be fully funded by cash through internal resources.
These countries are Cambodia, the Maldives, Sri Lanka, Thailand, and Turkey.
The decrease was driven by profit declines in their beer and non-alcoholic businesses.
Sources say the state-owned Chinese firm is in talks with advisers about the potential divestment.
The tests start on 29 November.
Exercise CyberMaritime 2021 puts the sector's cybersecurity readiness to the test.
This is equivalent to 236 attackers per company in a year.
Genting Singapore was seen with the most growth.
The partnerships aim to improve care delivery and patient outcomes.