Singapore telco M1’s suitors Keppel and SPH say they won’t raise offer price

SINGAPORE: Singapore conglomerate Keppel Corp and Singapore Press Holdings (SPH) said today they will not raise their offer price to gain majority control of mobile operator M1 Ltd, a move that could put pressure on Axiata Group, M1’s single largest shareholder.

Keppel and SPH, which together control 34.3% of Singapore’s smallest mobile operator, said in September they would offer S$2.06 (RM6.25) per share for majority ownership of M1 in a bid to support its falling share price and restructure the firm to better compete against sector rivals.

“The offeror wishes to announce that it does not intend to increase the offer price of S$2.06 in cash per offer share under any circumstances whatsoever,” Keppel and SPH said in a regulatory announcement issued by their jointly-owned holding company.

The closing date was extended to Feb 18 from Feb 4. M1 has a total market value of S$1.92 billion.

Malaysia’s Axiata, which holds a 28.3% stake in M1, said in September the offer should reflect the accurate future value of M1, inclusive of an acceptable control premium and consistent with market standards.

Axiata said at the time it was working with an adviser and was reviewing its options. Reuters cited a source as saying Axiata viewed the offer price as “inadequate”.

In response to a query from Reuters, Axiata said it would not comment on today’s statement. “Axiata will make any necessary announcements as required and in due time,” it said.

Since the September announcement, M1’s shares have rallied 26% to trade at S$2.05 today but are little changed over the past two years and have lost 49% from a record high of S$3.99 in early 2015.

Mobile telecoms competition is heating up in Singapore, with Australia’s TPG Telecom planning to launch a new service after winning a licence to become the city-state’s fourth telecom operator. Analysts consider M1 to be the most vulnerable to new competition.

In July 2017, Axiata, Keppel and SPH had considered, and then called off a strategic review of their M1 shareholding, which sources said was due to a lower-than-expected offer from external parties.

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