Keppel’s stock plunged as much as 13% to head for its lowest close in more than four years, and was the worst performer on the Straits Times Index.

The company’s dollar bonds due 2025 declined the most since they were sold in May, according to Bloomberg-compiled prices.

Temasek’s “withdrawal is a surprise,” said Joel Ng, an analyst at KGI Securities (Singapore) Pte. “My base case was for Temasek to lower its offer price for Keppel Corp in light of the impact of Covid-19.”

Credit Suisse Group AG and Macquarie Group Ltd downgraded their rating on Keppel’s stock.

Kyanite Investment Holdings, a unit of Temasek, invoked a clause allowing it to withdraw the offer after Keppel’s quarterly loss failed to meet pre-conditions of the bid, it said in a statement Monday.

Kyanite in October offered S$4 billion for an additional 30.6% stake in Keppel.

Jin Rui Oh, a director at United First Partners said that Temasek’s withdrawal has set a precedent of the state investor walking away from deals on account of the so-called material adverse change clause.

Investors need to be “more wary of such pre-conditional deals going forward,” he said.