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Keppel Corp secures 90.9% of Keppel Land, to delist property unit

SINGAPORE — Keppel Corp has secured enough acceptances for its S$3 billion takeover offer of Keppel Land to allow the conglomerate to delist its property subsidiary as it looks to enjoy more diversified income streams following the buyout. In its regulatory filing with the Singapore Exchange (SGX) yesterday, Keppel Corp said its stake in Keppel Land had grown to 90.9 per cent, a day ahead of the offer deadline today.

SINGAPORE — Keppel Corp has secured enough acceptances for its S$3 billion takeover offer of Keppel Land to allow the conglomerate to delist its property subsidiary as it looks to enjoy more diversified income streams following the buyout. In its regulatory filing with the Singapore Exchange (SGX) yesterday, Keppel Corp said its stake in Keppel Land had grown to 90.9 per cent, a day ahead of the offer deadline today.

“Keppel Corp does not intend to maintain the listing status of Keppel Land,” it said, adding that trading in the shares will be suspended after the close of offer at 5.30pm today.

While the free float below 10 per cent allows it to remove Keppel Land from the trading board under SGX listing rules, the stake is still shy of the 95.5 per cent needed for compulsory acquisition of the shares that it does not already own. In January, Keppel Corp, which already held 54.6 per cent of Keppel Land, made the unconditional cash offer to buy out the rest of the shares at S$4.38 or S$4.60, with the higher price to kick in if a certain stake threshold is met.

In a research note on Monday, OCBC Investment Research highlighted the significance of the stake thresholds. With a shareholding above 90 per cent but short of 95.5 per cent, Keppel Corp can delist Keppel Land but the offer price remains at S$4.38 per share, it noted. Past the higher threshold — whereby Keppel Corp would have received acceptances from 90 per cent of the shares not already held before the offer — it will be able to compulsorily acquire all remaining Keppel Land shares and the offer price will be raised to S$4.60.

OCBC added: “After the 90 per cent level is achieved, we believe residual minority shareholders who are holding out may be more inclined to subsequently accept, given the disincentive of holding illiquid delisted shares; and at that juncture, a higher likelihood of a compulsory acquisition and a S$4.60 price.”

Taking Keppel Land private will enable Keppel Corp to streamline its organisational structure to allocate capital and direct resources across its core businesses to optimise risk-adjusted returns and enhance shareholder value, the firm said.

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