Temasek-linked consortium makes $3.4b bid for SPH

SINGAPORE - A consortium linked to Singapore state investor Temasek Holdings on Friday proposed buying media and real estate company Singapore Press Holdings Ltd (SPH) for about $3.4 billion, seeking to out-bid conglomerate Keppel Corp.

The new offer has set the stage for a potential bidding war among investors eyeing SPH's property assets, which include malls, student accommodation and facilities for care of the elderly.

The consortium Cuscaden Peak, which includes billionaire hotelier Ong Beng Seng and two firms affiliated with Temasek, offered $2.1 per SPH share in cash, topping Keppel's cash-plus-share offer of $2.099.

Both offers are conditional on SPH completing a planned spinoff of its media business.

SPH's board said in an exchange filing that it was considering the unsolicited proposal from Cuscaden Peak and that it would act in the best interests of all shareholders and in accordance with its fiduciary duties.

SPH is in the process of transferring its media business, which includes the Straits Times and Business Times, into a not-for-profit company to help it secure funding from a range of public and private sources. The money-losing business has struggled in recent years with falling advertising revenue.

"SPH has good quality assets so we do not discount the possibility of seeing more bidders," said Eing Kar Mei, an analyst at CGS-CIMB. She said SPH's pro-forma net asset value, excluding the media business, as of August was about $2.18 - still higher than the two offers.

SPH holds stakes in a handful of malls in Singapore and Australia, including high-end Paragon in the city-state's Orchard Road, through SPH Real Estate Investment Trust. It also owns student accommodation in Britain and Germany, as well as a private nursing home in Singapore and aged care assets in Japan.

Eing said SPH's student accommodation and aged-care assets would be particularly attractive to investors as the two segments are seen as resilient.

Trading in shares of SPH, which has a market capitalisation of $3.2 billion, were halted on Friday morning pending an announcement. The stock closed at $1.99 on Thursday.

Keppel, which counts state investor Temasek Holdings as a major shareholder, in a separate statement said it would review Cuscaden Peak's all-cash offer. The Keppel deal includes a $34 million break fee.

The Cuscaden Peak consortium comprises a unit of Singapore-based Hotel Properties Ltd, Hotel Properties Managing Director Ong Beng Seng and subsidiaries of Mapletree Investments Pte Ltd and CLA Real Estate Holdings, which are independently managed portfolio companies of Temasek.

Morgan Stanley Asia (Singapore) Pte is financial adviser to Cuscaden.

SPH's board said Cuscaden Peak's proposal was not a firm offer and that the two had not entered into any definitive or binding agreement.

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