OREANDA-NEWS. Keppel Corporation Limited (Kepcorp) has today launched a voluntary unconditional cash offer for all the remaining shares of its subsidiary, Keppel Land Limited (Kepland). Currently Kepcorp owns 54.6% of Kepland.

Kepcorp is adopting a two-tier offer price approach with the intent to privatise Kepland as follows:

i) Base Offer Price of SUSD 4.38* for each Kepland share.

This Base Offer Price values Kepland at approximately SUSD 6.8 billion and represents:

a) a price which exceeds the highest closing price of Kepland shares over the past three years preceding the offer; and

b) a premium of 25%, 29% and 28% over the one-month, three-month and six-month volume weighted average price (VWAP) of Kepland shares respectively, preceding the offer.

ii) Higher Offer Price of SUSD 4.60* for each Kepland share, to be paid when Kepcorp acquires Kepland shares or receives acceptances that will entitle it to exercise its rights of compulsory acquisition under the Companies Act.

This Higher Offer Price values Kepland at SUSD 7.1 billion and represents a premium of 31%, 35% and 35% over the one-month, three-month and six-month VWAP of Kepland shares respectively, preceding the offer.

The Higher Offer Price, if applicable, will be paid to all shareholders who have accepted the offer, including those who have accepted the offer at the Base Offer Price.

acquired with the right to receive any distribution that may be declared, paid or made by Kepland on or after the offer date

Kepcorp believes its Base Offer Price is a fair and compelling offer to Kepland shareholders, amid Kepland's latest financial performance and the current environment it is operating in. The Higher Offer Price is designed to reward Kepland shareholders if Kepcorp is able to privatise Kepland. Kepcorp does not intend to revise the Offer Price.

The offer will be funded through a combination of internal cash and borrowings of Kepcorp.

In explaining the rationale for the offer, Mr Loh Chin Hua, Chief Executive Officer of Kepcorp, said, "We are staying our course to further grow Kepcorp as a strong conglomerate with sizeable contributions from all our three core businesses, and aligning our interests and synergies to enhance value to our shareholders.

"This is a sound and well-timed investment in a business which has been integral to Kepcorp and is in core markets like Singapore, China, Indonesia and Vietnam where we hold a long term positive view.

"Through this offer, we will unlock value for Kepcorp shareholders who will see a strong and immediate accretion to Earnings Per Share and Return on Equity. It will also allow Kepcorp to further develop and achieve greater scale for the property business leveraging on the Keppel Group's financial and organizational strengths."

If the offer results in Kepcorp owning a 100% of Kepland, it is expected to be accretive for shareholders of Kepcorp. Assuming full acceptance of the offer, the earnings per share and net asset value per share for Kepcorp for FY 2014 will increase by 13% and 4% respectively.

Further details on the offer are set out in the offer announcement dated 23 January 2015, and the offer document to be despatched to shareholders of Kepland in due course.