On Thursday (27 September), Keppel Corp and SPH announced that they will be making a pre-conditional voluntary general offer of $2.06 for the remaining shares in M1 that they do not own.
Four listed companies are involved in the takeover offer of M1 – they are detailed below.
M1 – Singapore’s 3rd Largest Telco Provider
M1 is the third largest telecommunications provider in Singapore. The telecommunications industry itself has been heating up in recent years.
In the past couple of years, the telecommunications market has become increasingly competitive. One main reason was the awarding of a fourth telco license to TPG Telecom, an Australia-based telco provider. This has also led to the introduction of products with tighter margins, such as the SIM-only plans, by all telco providers.
Lastly, MVNOs, or virtual mobile network operators, have also entered the fray – buying spectrum from existing telco providers to resell to consumers. These MVNOs include Circles.Life, Zero Mobile, Zero 1 and My Republic.
#1 Keppel Corporation (SGX: BN4)
With diverse business in the Offshore & Marine, Property, infrastructure and investment industries, Keppel Corporation is one of the largest conglomerates in Singapore.
Keppel Corporation primarily owns shares in M1 through its subsidiary Keppel Telecommunications & Transportation (Keppel T&T), which owns close to 19.3% of M1. As part of the deal, it will be taking Keppel T&T private as well.
Since the announcement of the acquisition made on Thursday (27 September 2018), Keppel’s share price dropped nearly 2.8% to $6.96 as of Friday (28 September 2018).
In the last four years, Keppel’s share price has declined close to 33.1%.
#2 Keppel Telecommunications & Transport (Keppel T&T) (SGX: K11)
As mentioned, Keppel T&T would be taken private as part of a separate deal.
Currently, Keppel Corporation already owns 79.2% of Keppel T&T, and will offer to buy out remaining shares it does not currently own at $1.91 per share. This represents a premium of close to 40.4% over Keppel T&T’s last traded price.
Since the announcement to acquire M1, Keppel T&T’s share price has risen to $1.86, still under the offer price of $1.91.
In the last four years, Keppel T&T’s share price has risen 10.7%.
#3 Singapore Press Holdings (SPH) (SGX: T39)
SPH itself has been under increasing pressure to perform in a world rapidly going digital. This deal may offer the media company to further diversify its business, having already ventured into properties and even education.
Currently, SPH owns nearly 13.5% of M1.
Since the announcement of the acquisition on Thursday (27 September 2018), SPH’s share price has increased about 2.9% to $2.87 as of Friday (28 September 2018).
In the past four years, the embattled media company has seen its share tumble 32.0% from nearly $4.22.
#4 M1 (SGX: B2F)
Finally, the star of the show, M1 has seen declining financial performances, especially since the announcement of TPG Telecom being awarded a fourth telco license. M1
M1’s major shareholder isn’t even any of the companies mentioned above. In fact, its major shareholder is Malaysia’s Axiata Group – which news reports say are likely to reject the offer.
Since the acquisition announcement on Thursday (27 September 2018), M1’s share price has surged nearly 29.4% to $2.11 from $1.63. This price level was last reached over a year ago in June 2017.
M1’s share price has been on a gradual down trend, losing nearly 60.8%, from a high of $3.93, until news of its acquisition caused its share price to rebound sharply. Even so, it is still down 41.7% in the past four years.
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