Keppel Corp offers to acquire non-media businesses of Singapore’s SPH in $2.5b deal

Singapore city skyline. Photo: Nicky Loh/Bloomberg

Singapore real estate, infrastructure, and marine conglomerate Keppel Corp is set to acquire the non-media businesses of Singapore Press Holdings (SPH), and privatise the business in a S$3.4 billion ($2.51 billion) deal.

Keppel’s offer to buy out minority shareholders in SPH comes three months after the latter hived off its media business — comprising the daily broadsheets The Straits Times and The Business Times, magazines, radio, billboards, and book publishing — into a not-for-profit entity in a restructuring. 

SPH’s non-media businesses span property development; a portfolio of purpose-built student accommodation in the UK and Germany; a portfolio of aged care homes in Singapore and Japan; and a mall in Singapore. 

It also has a 66% stake in the separately-listed SPH Real Estate Investment Trust, which holds interests in a portfolio of malls in Singapore, and Australia. 

SPH also has in its stable a portfolio of digital businesses, including a majority stake held with Keppel in the telco M1; and education providers MindChamps and Han Culture and Education Group.

For the first half of its financial year ended March 30, 2021, SPH’s media business contributed a paltry 2.2% to the group’s pre-tax profit. The bulk, or S$86.3 million, came from the retail and commercial businesses. Student accommodation accounted for S$22.4 million, or 16%.

SPH also noted in its 1H2021 financial report that it holds a 0.1% stake in Korean e-commerce company Coupang, which listed on the NYSE in March. At current market valuations, SPH’s stake in Coupang, which was acquired at $3.9 million, is worth roughly $60 million.

Taken as a whole, Keppel’s offer for the businesses represents a 40% premium to the price that SPH was trading at before the strategic review of its businesses was announced on March 30. 

After the transaction, SPH will be delisted and become a wholly-owned subsidiary under Keppel. Keppel will hold approximately a 20% stake each in the separately-listed SPH REIT and Keppel REIT.

SPH’s portfolio of student accommodation and aged care facilities will likely augment Keppel’s real estate businesses. Keppel’s property development unit accounts for the bulk of its pre-tax profit, or S$720 million for the financial year 2020. Its energy and environment unit, which holds its rigbuilding business, posted a pre-tax loss of S$1.25 billion for the same period.

In a statement, SPH said that it had evaluated offers “from a number of potentially interested parties” before the offer from Keppel was selected.

The offer is still subject to approval by shareholders in SPH and Keppel, and regulators.

Meanwhile, Keppel itself has undergone a review of its businesses — namely the restructuring of its once-core offshore and marine unit following a slump in its rig-building business. In June, Keppel and its key rival Sembcorp Marine, both majority-owned by Temasek Holdings, said they are exploring a merger of their rig-building businesses. 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.