Singapore state investment giant Temasek Holdings is backing out its USD$3 billion conditional offer with Singapore conglomerate Keppel Corp. The former is invoking a material adverse change (MAC) clause when the latter released poor financial statements.
Keppel reported a huge second-quarter loss that breached a threshold in Temasek’s offer to take over control of the conglomerate.
Temasek Holdings says it will announce final decisions by August 31, 2020.
Investment Analysts predict Temasek’s decision to back out of takeover will cause an shock in the markets as most analyst formerly presumed they were going to be at the forefront of this consolidation.
Temasek offered to increase its one-fifth stake in Keppel to 51% in October 2019. .
Refinitiv data notes that Keppel Corp’s made a net loss of Singaporean Dollars S$697 million for April to June, from a net profit of S$153 million just a year earlier.