Keppel Limited

[Layman A]

Hi grubb,
You are sharp !
I agreed that this delisting offer will have a high chance of failing.
But I am confident that Keppel would extend the offer with a better offer price higher than $4.60 .

Hi Boon,

Can you explain to me how a scenario 3 could happen.

I think 3 scenarios could happen at the close of the offer:

1) If KepCorp crosses the compulsory acquisition threshold (>90%) => compulsory acquisition and delisting of KepLand
2) If KepCorp fails to cross the compulsory acquisition threshold ( < 90% ) BUT KEPland still meets the “free float” requirement of the Listing Manual (i.e. at least 10 per cent of the total number of issued Shares are held by at least 500 Shareholders who are members of the public) => KepLand would remain listed.
3) If KepCorp fails to cross the compulsory acquisition threshold ( < 90% ) AND KepLand does not meet the “free float” requirement of the Listing Manual => KepLand would be delisted until the "free-float" condition is restored.
" In the event the Company does not meet the free float requirements of the Listing Manual, the Offeror does not intend to maintain the present listing status of the Company and accordingly, does not intend to place out any Shares held by the Offeror to members of the public to meet the Shareholding Requirement. "

KepCorp holds 89%, less than 500 other shareholders who are members of the public hold the other 11%.

Doing this exercise out of curiosity.

Kepland has 1,545,288,730 shares outstanding at the moment. Let's assume Kepcorp holds 89.9% and there are 499 other shareholders holding the 10.1%. And let's assume Blackrock is one of those who do not tender. Blackrock holds 3.245% by themselves, so the remaining 498 shareholders holds 6.855%.

This means at current price of $4.54, 498 shareholders will on average each own $965,703 worth of Kepland shares. Obviously, their portfolio is not entirely made up of Kepland. So lets assume each of the 498 shareholders have 10% of their portfolio in Kepland, which make all of them worth ~10mil.

I know Singapore is a rich man place, but I don't think there's 498 10millionaires sitting around with Kepland shares (although you never know).

Its very much more likely that these shareholders will have sold their shares on the market now at 4.54, so if the freefloat is >10%, the number of shareholders will be vastly more than 500.

Alternatively, if the freefloat is >10% and number of shareholders is <500, Kepland will put up a notice to warn of trading suspension. Being a GLC, I doubt Kepland will be delisted while there are still minorities holding on. Minorities will know the game is up and they will quickly tender to get their $4.60.

So right now the problem is as Layman A pointed out. You wait for me, I wait for you. In the end nobody tender and the delisting fails.

Thats just my guess. Did this make sense?