Sembcorp Marine's Shares Face Dilutive Effect From Proposed Merger -- Market Talk

Dow Jones2022-04-28

0454 GMT - Sembcorp Marine's shares face a dilutive effect from the company's proposed merger with Keppel's offshore-and-marine unit, Citi analysts say in a note. Sembcorp Marine's shareholders should brace for a net-tangible-asset dilution to S$0.07/share from S$0.12/share for the combined entity, given its assessed S$8.7 billion fair value estimate, they say. This is because Keppel will hold 56% of the new entity while Sembcorp will have the remaining 44%, the analysts say. Though the new entity's larger platform may provide scale benefits, it also means navigating a larger cost base that will require a steady flow of order wins. Citi has a buy rating on Keppel and a sell rating on Sembcorp Marine. (yongchang.chin@wsj.com)

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April 28, 2022 00:54 ET (04:54 GMT)

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Comments

  • LIMCHENGZU
    2022-04-28
    LIMCHENGZU
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  • V K
    2022-04-28
    V K
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