Keppel Ltd. · SGX:BN4
Keppel — Merger or Acquisition (August 2021)
25 slides from Keppel's merger presentation, Aug 2, 2021
Slide 1: Acquisition of Singapore Press Holdings Limited excl. SPH Media
Acquisition of Singapore Press Holdings Limited excl. SPH Media (“SPH”) 02 August 2021
Slide 2: Disclaimer
Disclaimer NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION. THIS PRESENTATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL, SUBSCR
Slide 3: Contents
Contents Transaction overview Transaction rationale Conclusion and next steps Appendix
Slide 4: Transaction overview
Transaction overview
Slide 5: Summary of proposed transaction
Summary of proposed transaction Offeror: Keppel Pegasus Pte. Ltd., a wholly-owned subsidiary of Keppel Corporation Limited Offeror to acquire 100% of Singapore Press Holdings ex media (“SPH”) via a Scheme of Arrangement1 Excludes media business Excludes SPH’s c.45% stake in SPH REIT (SPH to
Slide 6: Rare opportunity to acquire synergistic platform aligned to Vision 2030
Rare opportunity to acquire synergistic platform aligned to Vision 2030 Financially attractive, enhances returns and earnings profile Pro-forma recurring income 1 Pro-forma EPS accretion1,2 2 3 Maintain gearing4 headroom contribution1,3 Deleveraging in the +18% 56% <1.0x near term through S$0.175
Slide 7: Strategic importance of SPH acquisition to Keppel's Vision 2030
Strategic importance of SPH acquisition to Keppel’s Vision 2030 Increase scale in existing and Pursue new growth initiatives Improve quality of earnings new business units per Vision 2030 2020 2021 2030 Roll out of Vision Announcement of Keppel 2030 roadmap Offshore & Marine (“KOM”) non-
Slide 8: Accelerate growth in 3 of 4 Vision 2030 focus areas
Accelerate growth in 3 of 4 Vision 2030 focus areas Excludes: Media1 SPH portfolio value5 by focus areas (%) SPH REIT (c.45% stake)2 PBSA SPH REIT Senior Living Other investments3 Connectivity 12% 6 Asset Japan assets Management Urban Large PBSA owner- Retail REIT platform Leading nursing Value
Slide 9: Transaction rationale
Transaction rationale
Slide 10: Acquisition will accelerate Vision 2030
Acquisition will accelerate Vision 2030 through enhancing and unlocking value of SPH’s portfolio 1 Uniquely positioned to enhance and unlock value of SPH’s portfolio 2 Expand into secular growth sectors (PBSA and senior living) and benefit from recovery in retail 3 Build scale in Asset Management pl
Slide 11: Keppel is uniquely positioned to enhance and unlock value of SPH's portfolio
1 Keppel is uniquely positioned to enhance and unlock value of SPH’s portfolio Asset Management Urban Development Connectivity REITs & BTs Senior Living Keppel Data Centres Genting Lane Data Centre (84%) (60%) Restructured PBSA Other Woodleigh Seletar Mall Investments Genting Lane (REIT stake / Mana
Slide 12: Opportunity to diversify into high quality retail REIT platform poised for recovery
2 Opportunity to diversify into high quality retail REIT platform poised for recovery Recovering distribution S$ cents Retail recovery with Continued resilience of advanced vaccination 1.39 1.46 1.38 1.38 suburban malls 1.20 1.24 S$18-19m coverage and reopening manager fee providing essential re
Slide 13: Achieve immediate and sizeable foothold in attractive PBSA sector
2 Achieve immediate and sizeable foothold in attractive PBSA sector through integrated owner-operator PBSA platform Dual flagship brands with nationwide Rapid recovery in UK higher education underpinned by rising domestic and international presence demand UCAS applications up 8% for AY Next year s
Slide 14: Drive AUM growth and diversification of Keppel's Asset Management business
3 Drive AUM growth and diversification of Keppel’s Asset Management business +27% Diversification into recovery themes of PBSA c.S$47b and Singapore retail 3 c.S$37b 16% 4% Alternative assets 16% 7% Tapping into senior living growth potential Infra funds 6% 16% Data centre funds 8% 20% Significantly
Slide 15: Accelerate asset-light strategy through proactive capital recycling
3 Accelerate asset-light strategy through proactive capital recycling On balance sheet Existing private Future managed Existing REITs fund platform entities PBSA securitisation PBSA Data Centre Retail Senior living 20% stake, in line with other Senior living REIT holdings incl. SPH REIT Potential as
Slide 16: Optimise stake in Keppel REIT in line with asset-light business model
3 Optimise stake in Keppel REIT in line with asset-light business model 20% 18% 21% 7% 12% 20%1 Utilisation of K-REIT units as part of Offeror Consideration aligns retained stake across Group REITs and KIT K-REIT to benefit from significantly enhanced free float from 54% to 80% Keppel retains
Slide 17: Multiple levers to enhance and unlock value of SPH's portfolio
4 Multiple levers to enhance and unlock value of SPH’s portfolio Existing investments Monetisation of unlisted investment holdings Organic growth and synergies Portfolio NOI and REIT yield headroom Business model track record in driving growth Scale and scope synergies across capabilities, o
Slide 18: Acquisition to enhance Keppel's quality of earnings
5 Acquisition to enhance Keppel’s quality of earnings 1H21 Pro-forma EPS1,3 1H21 Pro-forma recurring income contribution2,3 S$ Non-recurring income Recurring income 0.175 +6% 49% 44% 0.165 51% 56% Keppel Keppel + SPH Disclaimer: 1 (1) Excludes the gain arising from the change in interest in Keppel R
Slide 19: Sufficient debt headroom remains for other strategic initiatives
6 Sufficient debt headroom remains for other strategic initiatives Gearing1 Funding mix takes into account gearing levels and disciplined deleveraging plan < 1.0x 1 Cash consideration assumed to be funded using a 0.85x combination of various sources, such as internal cash, bank 2 borrowings, inst
Slide 20: Conclusion and next steps
Conclusion and next steps
Slide 21: Meaningful acceleration of Keppel's growth strategy under Vision 2030
Meaningful acceleration of Keppel’s growth strategy under Vision 2030 1 Uniquely positioned to enhance and unlock value of SPH’s portfolio Expand into secular growth sectors (PBSA and senior living) and benefit from 2 recovery in retail 3 Build scale in Asset Management platform 4 Harness corporate
Slide 22: Indicative transaction milestones
Indicative transaction milestones Aug 02, 2021 By Oct / Nov 2021 Joint Announcement Expected date of Keppel of Scheme EGM Expected date of SPH Dec 2021 Scheme meeting Expected effective date of Scheme 21
Slide 23: Appendix
Appendix
Slide 24: Composition of Offeror consideration to SPH
Composition of Offeror consideration to SPH Implied S$2.099/share offer price S$1.2b 39.9% 16.2% 11.6% SPH REIT units Premium Premium Premium (S$0.716 (c.45% DIS stake) /share) S$1.806/share S$1.880/share S$1.500/share Equity value of SPH (ex media and ex 45% SPH S$2.2b (S$1.383 REIT stake, but /sha
Slide 25: Keppel post acquisition of SPH ex-media
Keppel post acquisition of SPH ex-media Energy & Environment Urban development Connectivity Asset management Keppel O&M Keppel Land Keppel Data Centres Keppel Capital (Announcement of non-binding MOUs) Woodleigh Development (50%) Genting Lane Data Centre PBSA (100%) Keppel Infrastructure Seletar Mal