In a rather stunning turn of events, Keppel announced on 10 August 2020 that it will not be proceeding with the partial offer for Keppel Corp. Temasek’s decision to walk away outright is likely a huge negative surprise to the market as most in the street still expect the offer to proceed, albeit at a lower offer price from the original level of S$7.35/share.

The timing is particularly weird as it comes a day before the crucial EGM of Sembcorp Marine and Sembcorp Industries. I would have expected Temasek to make a decision to walk away or continue with the partial offer deal based on the results of the Sembcorp Group EGM. I highlighted in a previous article that Temasek will be incentivized to carry on with the partial offer to take majority ownership of Keppel if the Sembcorp EGM proceeded as per their expectation, ie one where all the resolutions are duly passed.