Keppel Land

Keppel Land: (S$3.65) Parent makes cash offer of $4.38/4.60, below book value After a long three-day silence, parent Keppel Corp finally launched a voluntary unconditional cash offer for its property unit in a hastily prepared press release with no letterhead. There will be a two-tier price approach to the offer: 1) Base offer price of $4.38 or; 2) Higher offer price of $4.60, if acceptances breaches the 90% compulsory threshold The higher offer price, will be paid to all shareholders who accept the offer, including those who have accepted at base offer price, if Keppel Corp succeeds in privatizing its 54.6% owned property subsidiary. Keppel Corp does not intend to revise the offer price, which will include Keppel Land's FY14 dividend of 14¢ per share. The base offer and higher offer prices translate to discounts of 11.5% and 7% to Keppel Land's latest NAV/share of $4.95. This compares to market consensus RNAV of $5.48. As a comparison, Capitaland's recent privatisation of CapitaMalls Asia was transacted at a 21% premium to its book value.