Friday 10 September 2021

Historic Moment for Singapore Press Holdings Group- Goodbye to Media and Press Business!

What an exciting day it has been for the shareholders and management of Singapore Press Holdings (“SPH”). The results of the EGM has finally been announced. Goodbye to Media segment….what a historic moment indeed for SPH milestone! Despite seemingly fierce resistance put up by the minority retail investors asking that Media business be either sold to an interested party or to simply just shut down the media business [instead of paying S$80Mil in cash and other assets for transfer over to the newly formed Company Limited by Guarantee (CLG)], the objections turned out to be only pinpricks in the vast ocean. An overwhelming 97.6% of shareholders voted “Yes” for the first resolution to transfer the Media business out to the CLG while 97.5% voted “Yes” for the second resolution to adopt a new constitution for SPH.
 
Why can't the CEO close down the Media segement? Reason is simply that it is a public good despite SPH being a listed company
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.
 
Only option left is to unwind the Media segment by paying a divorce fee
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.
 
Will SPH became part of Keppel Corp?
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.


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