Temasek To Increase Stake In Keppel Corporation: What Investors Should Know
In what is probably the biggest news of the Singapore stock market in some time to come is that of Temasek looking to raise its stake in Keppel Corporation (SGX: BN4). This was announced after lunchtime today.
Temasek’s wholly-owned subsidiary, Kyanite Investment Holdings, is looking to purchase an additional 30.55% of Keppel Corp’s shares at S$7.35 each. Currently, Temasek already owns 20.45% of the listed conglomerate. If the deal goes through, Temasek’s and Kyanite’s total holding will rise to 51%.
The offer price represents a premium of around 26% over Keppel Corp’s last traded share price of S$5.84.
Temasek intends to keep Keppel Corp listed on the Singapore stock exchange.
If successful, Temasek wishes to undertake a thorough strategic review of Keppel Corp’s businesses to create sustainable value for all shareholders. The review could result in Keppel Corp “refocusing on and strengthening certain businesses” and/or undertaking potential corporate actions such as joint ventures or mergers.
Temasek sees long-term potential in Keppel Corp’s businesses even though there are current challenges in the oil and gas sector and the economy in general.
There are certain conditions to be met before the offer goes through, such as getting approvals from domestic and foreign regulators.
At a share price of S$5.84, Keppel Corp has a trailing price-to-earnings (PE) ratio of around 16 and a dividend yield of 3.9%. At the offer price of S$7.35, the PE ratio goes up to 21, which could be attractive for investors to exit the business and deploy their funds into other more promising companies.
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The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. Readers should always do their own due diligence and consider their financial goals before investing in any stock.