Sovereign investor Temasek Holdings managing the deals

The Singaporean government is bidding to acquire a controlling stake, using its Temasek Holdings investment arm, in Keppel Corporation – a large, diversified business group with significant marine activities in shipbuilding and the offshore sector. The marine interests include Marina at Keppel Bay, one of Singapore’s key yacht marinas.

Keppel was earlier involved in developing a marina in China as part of a major real estate project, but it pulled out of the project last year.

So far Temasek Holdings has a 20.45% stake in Keppel, which is listed on the Singapore exchange, as is Semb Corp. Temasek has made a cash offer of S$7.35 per share to acquire a further 30.6%, giving it a 51% controlling stake.

Since news of this offer was made, Keppel’s shares have risen as much as 17% and the group has seen the largest intraday gain since 1998.

Keppel’s shares surged on the restructuring news on Tuesday, when its trading halt was lifted a day after Temasek – which has a 20.45% stake in Keppel – said it was offering S$7.35 a share in cash for an additional 30.6% stake in Keppel for a controlling 51% stake. The price represents a premium of 26% or S$1.51 over its last traded price of S$5.84 before trading was halted.

Keppel’s shares soared as much as 17%, its biggest intraday gain since 1998, on volumes 5.4 times its three-month average, according to Bloomberg data. It eventually closed at S$6.68 a share, up 84 Singapore cents, or 14.38%. A staggering 33.5 million shares worth S$225.6m changed hands.

In addition to its offshore and marine (Keppel O&M) interests, Keppel Corporation is also active in telecoms, real estate, asset management and infrastructure.

For its part, Temasek is among the largest institutional investors globally and its plan for Keppel is to work with the group’s management team to undertake a strategic review to assess where it might refocus its activities and strengthen them.

There is also a suggestion, as Temasek holds a 49.5% stake in the Semb Corp, the parent of Sembcorp Marine, another of Singapore’s major shipbuilding entities, that a merger between the two businesses might be on the cards.

For its part, like Keppel, Sembcorp Marine has had a small interest in the yacht market, as through its small ships division it has actively tried to gain a presence in the yacht repair and refit market using its Singapore facilities.

 

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