SPH

SPH: With regards to group's REIT listing, DB estimates that SPH is anticipated to receive c.$1.05b in net cash proceeds. This is based on the assumption of: i) an offering size of $540m; ii) a market cap of $2.2b for SPH REIT; iii) SPH REIT debt of $900m, less IPO expenses and amounts due to minority interests, etc; The cash proceeds translate into $0.66 per SPH share. Related to this, SPH has proposed an $0.18/share special dividend (cash) to shareholders, amounting to $290.9m. At current share price, this equates to an additional potential c.4% dividend yield. Post the spin-off of Paragon and Clementi Mall, SPH will continue to receive recurring management fees and dividends from SPH REIT. Based on initial assessment, DB estimate SPH will be able to maintain ~5% ordinary dividend yield by raising its payout ratio and/or with the help of proceeds from the property asset divestment. The underlying SPH stock would essentially be a structurally challenged media asset. Proceeds from the property asset sale could allow SPH to expand its presence in new media, but note the relative difficulty of monetizing such opportunities.