Axiata and shareholders won’t sell M1 stakes

PETALING JAYA: Axiata Group Bhd, along with two other substantial shareholders of M1 Ltd, have decided against the sale of their respective stakes in the Singapore wireless carrier.

The group told the stock exchange yesterday that the three parties, which collectively own over 61% in M1, had decided not to proceed further with the strategic review on their respective shareholdings.

Axiata had announced earlier in March that it was undertaking the strategic review, together with Keppel Telecommunications & Transportation Ltd (Keppel T&T) and Singapore Press Holdings Ltd, that “may or may not lead to a transaction”.

In the announcement yesterday, Axiata said the decision was made after taking into consideration the proposals from the interested parties which, despite a favourable level of interest, did not meet the minimum criteria and parameters as determined by the majority shareholders.

“No arrangement or agreement with any third party has been reached in relation to each majority shareholders’ respective shareholdings in M1 Ltd,” it said in the filing.

Axiata has 28.39%, Keppel T&T 19.23% and Singapore Press Holdings 13.38% in M1.

M1 has some 2.06 million customers. At its closing price of S$2.10 (RM6.59), it has a market capitalisation of S$1.95bil (RM6.13bil). The stock is up 7.14% on a year-to-date basis.

In March, Axiata said the three parties had jointly appointed Morgan Stanley Asia (Singapore) Pte as their financial adviser to assist with the strategic review.

It said there was no assurance that any transaction would materialise from the strategic review or that any definitive or binding agreement would be reached.

At the time, analysts estimated that the sale of Axiata’s stake in M1 could raise RM1.8bil.

Later in May, Bloomberg reported that Singapore Internet provider MyRepublic Ltd, backed by billionare Xavier Niel, was seeking a private-equity partner as part of its bid for M1.

Shanxi Meijin Energy Co and China Broadband Capital also reportedly submitted first-round offers for M1, which is Singapore’s third-largest carrier.

While M1 has been a steady source of dividend income for Axiata over the years, analysts have cautioned that its profitability was under threat with the potential entry of a fourth mobile player in Singapore, TPG Telecom Ltd, slated to begin wireless services in 2018.

According to Maybank Investment Bank Research, M1 contributed 25% to Axiata’s net profit in 2016.

Apart from Idea and M1, Axiata owns Celcom Axiata Bhd in Malaysia, and has stakes in Indonesia’s XL Axiata, Sri Lanka’s Dialog, Robi Axiata in Bangladesh, Smart in Cambodia, Nepal’s Ncell and Pakistan’s Multinet.

Axiata’s share price closed up one sen at RM4.65 yesterday.