SINGAPORE (REUTERS)- Temasek Holding’s $4.1 billion bid to acquire a controlling stake in Keppel Corp will be under scrutiny on Thursday as a big quarterly profit drop at the conglomerate could raise the risk of the state investor dropping its proposal, analysts said.

Keppel last week warned that material impairments relating to its offshore and marine segment (O&M) would hurt profits, which analysts say could breach so-called material adverse change (MAC) clauses of Temasek’s offer.

Analysts said the impairments would typically affect net asset value and net profit after tax, thresholds for which have been set as pre-conditions to an offer.

MAC clauses can be invoked to end or renegotiate deals, particularly if events occur that are detrimental to the target company.

To meet the threshold, Keppel would need to report $170-230 million in second-quarter core profits, excluding one-off items, assuming impairments of up to $150 million relating to its O&M business, Citigroup analysts estimate.

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