Only one day after it refused to confirm rumours to GTB, Singtel entered into conditional share purchase agreements with Temasek to acquire 21% of Intouch Holdings Public Company Limited (Intouch) and 7.39% of Bharti Telecom Limited (Bharti Telecom) for a total consideration of S$2.47 billion (US$1.84bn). The acquisitions will increase Singtel’s economic interests in AIS and Airtel.
The acquisitions will be settled fully in cash. This transaction will be funded through internal cash, short-term
Intouch is the biggest shareholder in Thailand’s largest mobile operator Advanced Info Services Public Company Limited (AIS). Bharti Telecom is the holding company of Bharti Airtel Limited (Airtel), India’s largest telecommunications company which has operations in 18 countries across South Asia and Africa. AIS and Airtel have been associates of the Group since Singtel acquired stakes in these businesses in 1999 and 2000 respectively. Through these acquisitions, Singtel will increase its economic interests in AIS and Airtel.
According to a statement put out today, the acquisitions are in line with the group’s long-term strategy to increase its exposure to high-performing associates in its portfolio of leading telecom businesses in the region. It seems they just didn’t want to confirm that long-term strategy to GTB yesterday.
The statement also said: “Thailand and India are fundamentally attractive markets which are reaping the benefits of rapidly increasing smartphone penetration and mobile data adoption by a growing middle class. Both AIS and Airtel are well-positioned to benefit from these trends. The recent mobile spectrum auctions in Thailand and ongoing industry consolidation in India have strengthened their competitive positions. They have also built for the future, securing significant spectrum for the long term and investing extensively in 3G and 4G networks and services.
GTB has previously pointed out that it has been the political instability in Thailand which has derailed previous discussions two years ago.
Singtel will pay Temasek THB60.83 for each share of Intouch and INR235.62 for each share of Bharti Telecom. The transaction is subject to the fulfilment of certain conditions precedent, including shareholder and relevant regulatory approvals, and is expected to be completed by December 2016.
An independent financial adviser (IFA) will be appointed to advise the independent directors of the Board. The advice of the IFA and the recommendation of the independent directors will be sent to shareholders prior to the convening of a shareholders’ meeting. Temasek is an interested party and will abstain from voting at the meeting.