By P.R. Venkat

Temasek Holdings Pte. will not proceed with its US$3.0 billion partial offer for Keppel Corp. as the rig builder's financial performance failed to meet conditions set by the state-investment company.

Temasek in October last year, through its unit Kyanite, offered to buy a 51% controlling stake in Keppel subject to certain conditions including no material adverse change in the rig builder's financial performance.

"The offeror has decided that it will invoke the MAC pre-condition, and accordingly, is announcing today that the partial offer will not proceed," Morgan Stanley, which is advising Temasek, said Monday.

The investment bank said that the Securities Industry Council of Singapore has confirmed that it has no objection to the withdrawal of the offer.

Earlier this month, Keppel reported a second-quarter loss of over US$500 million, primarily due to impairments and a weak performance in its offshore-and-marine business. 



  Write to P.R. Venkat at venkat.pr@wsj.com