Temasek’s “withdrawal is a surprise,” said Joel Ng, an analyst at KGI Securities (Singapore) Pte. “My base case was for Temasek to lower its offer price for Keppel Corp. in light of the impact of Covid-19.”
Credit Suisse Group AG and Macquarie Group Ltd. downgraded their rating on Keppel’s stock.
Kyanite Investment Holdings, a unit of Temasek, invoked a clause allowing it to withdraw the offer after Keppel’s quarterly loss failed to meet pre-conditions of the bid, it said in a statement Monday. Kyanite in October offered $4 billion for an additional 30.6% stake in Keppel.
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Jin Rui Oh, a director at United First Partners said that Temasek’s withdrawal has set a precedent of the state investor walking away from deals on account of the so-called material adverse change clause.
Investors need to be “more wary of such pre-conditional deals going forward,” he said.
