The thing about Media business is that it is actually a public good. If it can be so easily shut down just like a normal commercial entity, the CEO of SPH, Mr Ng Yat Chung, would have already shut down the business 2 years back instead of trying to do various rounds of Media staff restructuring exercises. As for selling to 3rd party, I have already explained in my previous post why this option would not work.
Consequently, the only way out of the loss making Media business is to pay a fair divorce fees to appease our Singapore Government. Ultimately, the current property business is being built using the enormous profits of Media segment back in its glorious days. With the transfer of Media segment and removal of the restriction of the Newspaper and Printing Presses Act, SPH can now finally function like a normal commercial entity and many corporate actions can be pursued by SPH besides the Keppel Corp offer.
The next major milestone would be whether SPH becomes a member of Keppel Corp in December’21. Even if that fails, SPH can definitely survive on its own. Its student accommodation business is the new growth driver which also provides resilient recurring income. I hope for a rally in SPH share prices next week after the trading suspension is over so that it more closely reflect the offered consideration of S$2.099 per share.
Previous posts on SPH:
1. SPH Media Spin Off EGM- Retail Investors Should Be More Pro-Active To Exercise Their Voting Rights -29 Aug 2021
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