M1 slumps after stakes sale plan aborted

PETALING JAYA: Shares in M1 Ltd slumped as much as 8% to S$1.935 yesterday after its substantial shareholders abandoned plans to sell their stakes in Singapore’s smallest telecom company.

The shares dipped the most in almost nine years from Tuesday’s close of S$2.10 (RM6.59), according to Bloomberg data. Its lowest was on Nov 19, 2008 at 72.9 sen.

On Tuesday, Axiata Group Bhd along with the other owners – Keppel Telecommunications and Transportation Ltd and Singapore Press Holdings Ltd – decided to end their strategic review of their shareholdings in M1, according to Axiata’s filings with the stock exchange.

Axiata, Keppel and Singapore Press collectively own over 61% in M1, of which Axiata holds 28.39%, Keppel 19.23% and Singapore Press 13.38%.

Axiata said the decision to strike off the plans was made despite the level of interest being “favourable” and it did not meet the minimum criteria sought by the sellers.

The move by M1 owners marked the difficulty of selling the smallest telco player in a saturated market.

M1, which has a market value of S$1.95bil (RM6.13bil) was seen at its highest on Aug 4, 2016 at S$2.72. The wireless carrier has some 2.06 million customers.

In December, it was reported that M1 was on the block because it was at risk to the entry of a fourth telco player in Singapore.

The report said that a unit of Australia’s TPG Telecom Ltd had won a bid in December to become Singapore’s fourth telco, with operations set to commence in mid-2018.

This is the first time in 15 years that the three-way hold on the telecoms market by Singtel, StarHub and M1 had eased, the report said.

Meanwhile, local analysts had warned that M1’s profitability was at risk with the potential entry of a fourth mobile player in Singapore, although M1 had been a steady source of dividend income for Axiata over the years.

M1 was said to own an average per-user revenue of S$58 in 2016 and unlike its rivals, it neither has other teelcom markets to run, nor a pay TV business to offset the fall.

Axiata shares closed up 3 sen or 0.65% at RM4.68 yesterday, with about 2.9 million shares traded.