SPH shareholders vote in favour of hiving off media business
SINGAPORE – Shareholders of Singapore Press Holdings (SPH) have overwhelmingly backed its plan to hive off its media business, paving the way for the formation of a new company limited by guarantee (CLG), while potentially unlocking shareholder value for the mainboard-listed company.
At a virtual extraordinary general meeting held on Friday (Sep 10), 97.55 per cent of shareholders voted in favour of the transfer of SPH’s media business to the CLG for a nominal sum of $1.
They also gave the green light to a special resolution to convert each management share held by a management shareholder into one ordinary share, and the adoption of a new constitution.
Some 369 million votes were cast at the EGM, which was helmed by SPH chairman Lee Boon Yang, chief executive Ng Yat Chung and chief financial officer Chua Hwee Song.
The move is the first step of a strategic revamp that could see the privatisation and sale of the rest of mainboard-listed SPH to Keppel Corp in a $3.4 billion deal. Shareholders of both companies will vote on the proposed acquisition at a later date.
SPH, which publishes The Straits Times, announced its plans to transfer the media business to a not-for-profit company as part of a strategic review of its various businesses on May 6.
The restructuring entails transferring all media-related businesses, including relevant subsidiaries, employees, the News Centre and Print Centre along with their respective leaseholds, as well as all related intellectual property and information technology assets, to a newly-incorporated, wholly-owned subsidiary.
The new CLG will initially receive financial help from SPH comprising $80 million in cash and $30 million in shares.
It will be chaired by former coordinating minister for infrastructure and transport minister Khaw Boon Wan, with veteran journalist and former SPH deputy chief executive Patrick Daniel as interim chief executive.
Shareholders will next vote on Keppel’s $2.2 billion bid to privatise SPH’s non-media business. An EGM for this will be called in October or November.
Under the proposed scheme, they will receive $2.099 per share, comprising cash of 66.8 cents per share, 0.596 Keppel Reit unit valued at 71.5 cents per share, and 0.782 SPH Reit unit valued at 71.6 cents per share.
With the demerger, SPH will also no longer need to be subject to the provisions of the Newspaper and Printing Presses Act (NPPA) which limits each shareholding to only 5 per cent.
Evercore Asia (Singapore), independent financial adviser to the SPH board, had earlier noted that the proposed restructuring of the media business “is in the overall interest of the company and shareholders”.
It noted that shareholders would not incur the “potentially significant and recurring losses of the media business”, and the move will allow the company to “set a clear strategic direction with a focus on the real estate sector and related segments of student accommodation and aged care”.
SPH had explained on May 6 that the media industry had faced “unprecedented disruption” in recent years, largely due to a decline in print advertising and print subscription revenue.
It had said that while the media business plays a critical role in providing quality news and information to the public, remaining part of a public-listed company, with shareholder expectation of profitability, was no longer a sustainable business model.
“Hence, a not-for-profit structure that allows SPH Media to seek funding from a range of public and private sources with a shared interest in supporting quality journalism and credible information is the optimal solution,” the company had said.
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