as you read by now, Sembcorp Marine shareholders also voted in favour to merge Keppel O&M into SCM to form a larger entity, this was a long overdue merger and it actually removes the shackles from Keppel Corp P&L
because of this M&A, Keppel Shareholders will be give 19.13 SCM shares for every 1 Keppel share.
This means for every 1 lot (1000) Keppel shares, shareholders will receive 19,130 SCM shares
These SCM shares will be distributed by 1st March
How will we add this in Stockcafe? its not really a costs (since we will not be paying anything for it), actually its like a bonus “dividend”, do we add it like a Scrip dividend?
here are the facts based on what I know, I can try to get you the article:
Keppel Corp shareholders WILL NOT lose their Keppel Corp holdings, it will remain, because Keppel is only divesting their O&M division to Sembmarine. not whole company
Because of this divestment, the enlarged entity of SCM will give 19.13 Sembmarine stock to each Keppel shareholder for each share that they own
this is like a bonus for Keppel Corp shareholders because just by owning Keppel, I will now also own equity in SCM (thats why I said it was like a bonus dividend, free equity) for long suffering Keppel Corp shareholders who did not get dividends for so many years when O&M was dragging down Keppel Corp earnings!!
How will the transactions be created?
will it be logged as a BUY but no actual costs will be added to a user’s Portfolio and in effect, the added new SCM shares value & qty will be added into the user Portfolio?
That is also set manually. Personally, I prefer to the actual price of SCM on that day because I believe your Keppel will likely drop by some amount close to actual price of SCM? So, it is kinda like you sell a bit of Keppel to buy SCM.
In my view no… some Keppel shareholders may quickly want to dump their SCM holdings for the “free money” so SCM may dip further due to many dumping their allotments…
But I think Keppel will have more upside, market is always forward pricing… so if your analogy will happen, it will happen in run up to 1st March…
What I meant is that the fact that there is this divestment, it is like they are selling some assets of Keppel but instead of getting it in cash and return to shareholders, they are “forcing” you to buy SCM.
Therefore, it is selling part of Keppel to buy SCM. So, I think pricing the SCM shares at 0 is “wrong” and it is better to price it at how much SCM was when you are “force” to buy.
Create a buy transaction of 19.1 shares of SembMarine (SGX:S51) on 1 March at 0.134 for every share of Keppel (SGX:BN4) that you own.
b) Treat it as a stock split style
Sell Keppel at the market value on 22 Feb (i.e. price = 7.34).
Buy Sembcrop at market value of 22 Feb (i.e. price = 0.134, shares = actual number of shares you received) on 23 Feb.
Buy Keppel back at the market value you sold (i.e. price = 7.34) at minus the market value of Sembcrop (shares received x 0.134 or 19.1 x 0.134 = 2.5594 assuming you actually got 19.1 because it is likely different due to rounding) on 23 Feb. Hence, if you actually got 19.1, then price = 7.34 - 2.5594 = 4.7806.