In 1998, the Singapore government declared its intention to
shake things up by lifting a longstanding ban on competition in the
nation's banking industry. Outsiders were to be allowed in, and
that meant the five local banks had better find a way to compete.
It was understood that they would do this through strategic mergers
among themselves, but for three years none of them was willing to
take the plunge.
Then on June 12, 2001, the Oversea-Chinese Banking Corporation,
or OCBC Bank, kicked off the consolidation process with a move to
acquire Keppel Capital Holdings. "They wanted to sell this as being
a virtue, they wanted to take the high ground, but the real risk
was that it would it would be seen in Singapore as a hostile
takeover, which was something that had never been seen in Singapore
before," says Weber Shandwick's managing director in Singapore
Andrew Pirie, who stepped up to the plate to develop the PR
messaging that would encourage acceptance of the OCBC bid both by
the general public and, more particularly, by the Keppel
managers.
It is easy to see how some might have called OCBC's bid a
hostile move. The Keppel management heard about the offer at 6
p.m., and the world at large got the news just 15 minutes
later.
Hostile? Not at all, Pirie insists. It was, rather, a matter of
transparency. The PR team encouraged OCBC management to focus on
the openness of the offer. By laying their bid out on the table,
they were simply inviting Keppel and others to judge the offer on
its merits. No more of the quiet backroom deals that had long
characterized local business dealings. Here was commerce conducted
for all to see.
Knowing that the press would not entirely buy into this story
line, the PR team also took pains to coach OCBC executives in
defensive tactics. "We worked on this issue very hard with the
whole bid team, including the chief executive of OCBC," Pirie
recalls. "It was the first thing he was asked about at the press
conference: 'Was this is a hostile takeover?' To which he replied:
'We would not characterize it that way.' "
Nor was muttering about a hostile takeover the only potential
issue on the table. Through soft-soundings of key audiences, such
as media and employees, along with a continuous monitoring of
market sentiment and media coverage, the PR team had crafted
responses to a range of potential concerns.
For example, there was worry that OCBC's all-cash offer would
strain its resources, so the PR messaging stressed a concurrent
$2.2 billion bond offer that would ensure an efficient capital
structure. The media might have been tempted to speculate about the
large-scale redundancies that could result from the merger. The PR
team advised OCBC to firmly refuse to discuss such matters, noting
that such questions were premature.
The PR team (with a $400,000 campaign budget, including
advertising) had the full support of OCBC management in its
efforts, and with good reason. As a first-of-its-kind merger in
Singapore, the move to buy Keppel was destined to be met with some
degree of skepticism. In this environment, "we had very strong
support of the PR function from our client, from the chief
executive and the chief financial officer right on down," says
Pirie. "We met every day with the investment bankers and even with
the lawyers."
"The top corporate lawyer in Singapore, Lucien Wong, was part of
the bid team, and he was a great guy to work with," says Pirie.
"There often is this love/hate relationship between PR people and
lawyers, but this guy knew exactly what we wanted to achieve, so
while he made sure we were legally appropriate in what we did, he
also was not going to be too pedantic on things."
If the lawyers were unusually cooperative, it is also true that
the PR practitioners in turn upheld an impressive degree of rigor.
Take for instance the issue of confidentiality. The nature of the
project demanded absolute secrecy, and the PR team obliged this
need, even to the point of encrypting their e-mail and referring to
the project by a code name (Project Thunder).
This high degree of discipline was driven in part by the
Monetary Authority of Singapore, which reviews all documents
relating to the takeover before they were released, including not
just financials but press releases, media briefs and so on.
Timing was always an issue: because of the need for secrecy,
invitations to the initial media conference and analyst briefing
could be issued only 90 minutes prior to the event. This kind of
breakneck-pace PR went further when OCBC put in a second bid a
month later.
Money had always been a sticking point in the bid, and by
mid-July the Keppel directors still had not taken the bait. After
some backstage wrangling, OCBC executives were ready on Friday,
July 13 to make a new offer. Some last-minute technicalities held
up the works, though, and they could not put the offer on the table
until the next day - a Saturday. The PR team knew the offer was
coming, but of course they could not give the media prior warning,
for fear of fouling up the deal.
At 2:30 in the afternoon, Pirie was pacing the halls of the
bank, waiting for the go-ahead. The minute the papers were signed,
he moved into action. "We had 90 minutes' warning to call a press
conference on a Saturday afternoon, which basically meant we were
calling journalists at home," he recalls. The effort came off,
drawing about 40 journalists including print, TV and all the news
wires, in part because Singapore is not that big a place, and also
because the media had been waiting for the story to break.
"This had been a big story for so many weeks," Pirie recalls.
"Most of the journalists showed up in jeans and T-shirts, but
everybody got there."
With positive media reactions, overwhelming shareholder approval
and, finally, a successful acquisition by the bank, Pirie counts
this campaign as an overall win for his firm, and especially for
his client.
The Campaign Team
From The Weber Shandwick, Singapore, Office: Managing Director
Andrew Pirie; Senior VP Peter Poulos, Financial Practice; Account
Director Ng Chip Keng; Account Director Geeta Mirchandani
Contact: Andrew Pirie, 656.825.8000, [email protected]