Keppel Corp only managed to secure 95.1 percent of Keppel Land’s stake despite extending the deadline to buy all of its free floating shares to Tuesday 31 March, according to a filing with the Singapore Exchange (SGX).
This is up from 93.9 percent on Monday and 93.2 percent during the original deadline last Thursday. As a result, Keppel Land can be delisted from the stock market, but Keppel Corp is still short of the 95.5 percent threshold needed to mandatorily acquire the remaining un-owned shares in its property arm.
With this, the stockholders who accepted its buyout offer are only entitled to the $4.38 stock price, not the higher offer of $4.60 per share.
As for those shareholders who did not accept the offer, they may require the group to purchase their shares based on the lower price as stated in the Companies Act.
Back in January when Keppel Corp held 54.6 percent of Keppel Land’s shares, it made an unconditional cash offer to buy all free floating stocks and convertible bonds at $4.38, or $4.60 if it hit the 95.5 percent threshold.
After this announcement, the price of Keppel Land’s stocks rose above $4.50 and had closed above that level since. It had even peaked at $4.58 on 20 March, but yesterday it dipped by one cent to $4.45, while that of Keppel Corp’s declined by four cents to $9 apiece.
The objective of privatising Keppel Land is to improve the conglomerate’s organisational structure so that capital and resources can be efficiently allocated across its core businesses, thereby leading to higher returns.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
