Keppel commences arbitration against SPH

Keppel Corportation has commenced arbitration proceedings against Singapore Press Holdings (SPH) over a dispute stemming from a battle for the latter. According to The Straits Times (ST), SPH had intended to consult the Securities Industry Council (SIC) - the regulator for takeovers and mergers - about terminating an acquisition agreement between the two firms in 2 August 2021, which values SPH at aSG$3.8 billion. At the same time, SPH was pressing ahead with preparations for shareholders to vote on Cuscaden Peak’s rival offer, The Business Times (BT) reported. Cuscaden Peak is a company formed by a consortium comprising Tiga Stars, Adenium, and Mapletree Fortress.

Keppel Corp then said in a Singapore Exchange filing on 9 February that it does not agree with SPH's attempted termination of the agreement, which sets out the terms and conditions for how Keppel's proposed bid for SPH will be implemented. However, SPH said in a separate filing that the Keppel scheme's cut-off date, which was on 2 February, has long passed and not all of the conditions set out in the agreement have been satisfied. 

SPH also stated that the implied value of the Cuscaden scheme consideration has remained superior to that of the Keppel scheme consideration. The implied valuation of the Cuscaden scheme consideration is SG$2.36 for the all-cash deal and SG$2.361 for the combination of cash and SPH Reit units, while the implied valuation of the Keppel scheme consideration is SG$2.318, which is below SPH's last trading price of SG$2.33 per share. 

Additionally, SPH noted in its filing that the SIC has ruled that it has no objections to it exercising its right to terminate the Keppel scheme. This would allow shareholders to vote at the Cuscaden scheme meeting as soon as possible. However, that there has yet to be any consensus as to which scheme would be submitted to court for approval in the event that both schemes achieve majority votes.

In August last year, 97.55% of SPH's shareholders voted in favour of transfering its media business to the company limited by guarantee (CLG) for a nominal sum of SG$1. That same month, The New Paper also discontinued its print edition and went fully digital from 11 December 2021, as part of SPH Media Trust's aim to accelerate the digital transformation of its newsrooms, including BT. Additionally, resources for ST will also be expanded. SPH Media Trust also officially merged Chinese evening dailies Lianhe Wanbao and Shin Min Daily News from 26 December 2021, with its last edition on 24 December 2021.

SPH reported a 69.8% increase in operating profit to SG$206.7 million for its non-media operations for the year ended 31 August 2021 (FY 2021). The improved performance was across all segments, including retail and commercial and purpose-built student accommodation (PBSA) despite the ongoing disruption from COVID-19, especially in the earlier part of the financial year. 

Total revenue for its non-media business grew to SG$475.1 million due to higher rental income from retail and commercial and PBSA driven by the expanded portfolios and lower tenant rental relief for retail tenants. On the other hand, revenue for the media business dipped SG$85.8 million (17.5%) as a result of lower advertisement revenue of SG$37.6 million (-14.1%) and circulation revenue of SG$17.2 million (-12.3%). Income from the job support scheme (JSS) was also lower by SG$10.3 million (36.7%).

Most recently, SPH Media Trust appointed veteran Teo Lay Lim as CEO of the SPH Media Group with effect from 1 March 2022. Teo took over the reins from CEO Patrick Daniel to overlook the transformation journey of SPH Media Group, and has been touted as a seasoned business leader who has a track record of building businesses from the ground up. "I am honoured to be given the opportunity to lead the SPH Media Group as CEO during these exciting times. As we work to keep pace with a very dynamic media landscape, I will be working closely with my colleagues in our transformation journey to create trusted products for our always-connected audiences," Teo said then.