Keppel Corp’s stake in Keppel Land reached 90.9 percent at the end of trading yesterday, allowing the company to delist its property arm from the Singapore Exchange (SGX).
“Under Rule 1303(1) of the Listing Manual, as the offeror has, through acceptances or otherwise, succeeded in holding more than 90 percent of the total number of issued shares, SGX will suspend trading of the shares the close of the offer,” the group said in a regulatory filing.
However, it is still short of the 95.5 percent that would allow it to free float, which represents the portion of shares in the hands of public investors.
Back in January when it owned 54.6 percent of all the shares, Keppel Land made an unconditional cash offer to acquire all un-owned stocks and convertible bonds at $4.38, or $4.60 if its shareholding hit 95.5 percent. That offer will close at 5:30pm today.
Commenting, OCBC Investment Research said: “After the 90 percent 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 $4.60 price.”
The rationale behind delisting Keppel Land is to improve the group’s organisational structure so that capital and resources would be efficiently allocated across its core businesses, thereby improving returns and enhancing shareholder value, it added.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
