China Mobile and global private equity firms are among the companies being considered by Singapore-based operator M1’s top shareholders as potential buyers of their stake, Reuters reported.
Combined, the 61 per cent stake is worth SGD1.14 billion ($813.5 million) based on M1’s market value of more than SGD1.91 billion.
M1 shareholders Axiata, Keppel Telecommunications and Transportation and Singapore Press Holdings in March announced a strategic review of their investments, and have approached other telecoms companies, cash-rich business groups in China and Japanese tech firms, the report said.
First-round bids for M1 are expected in a few weeks although discussions are still at initial stages.
Competition in the city state heated up ever since Australia-based fixed line operator TPG Telecom won its fourth mobile licence in a spectrum auction open only to new entrants.
Singapore’s telecoms market is well-regulated with stable cash flows, Reuters said, and could be used as a launch pad into Asia Pacific.
The report quoted Gregory Yap, analyst at Maybank Kim Eng Securities, as saying: “M1 could become part of a portfolio of investments in telecom-related assets. Someone looking for financial returns could be interested, if other portfolio companies could help to enhance M1’s overall value.”
In Singapore, a business acquiring a stake of 30 per cent or more in a listed company needs to make an offer to buy out the rest of the shareholders.
Some of Reuters sources said M1’s main shareholders would require a substantial control premium.
If China Mobile, the world’s largest operator, was to acquire M1, it would be its biggest investment overseas. It previously acquired an 18 per cent stake in Thailand’s True Corp, and in 2007 it bought Pakistani mobile operator Paktel.