Thailand’s Telecom Giants Resist Takeover Bids
Merger Plans Unfazed by Rejection Calls
In a surprise move, the boards of two leading Thai mobile carriers, Advanced Info Service and Thaicom, have urged investors to reject acquisition offers from their controlling entities. This development comes amidst a planned merger between Gulf Energy Development and Intouch Holdings, which aims to create a new entity worth a staggering 1.037 trillion baht ($30 billion).
A Billion-Dollar Merger
The merger, announced in July 2024, seeks to maximize benefits for both firms and improve operations and investments. Gulf Energy Development, the largest shareholder of Thaicom, and Intouch Holdings, which controls Advanced, are driving this consolidation effort. The new entity would be valued at $30 billion, making it a significant player in the region.
Stakeholders Weigh In
Gulf Energy Development owns approximately 47.4% of Intouch Holdings, followed by Singapore Telecommunication (Singtel) with a 25% interest. The two companies have a joint venture to establish data centers in Thailand, expected to commence operations this year. A tender offer was launched for Advanced, valuing the firm at 216.30 baht per share, later reduced to 211.43 baht. However, Gulf Energy Development has stated that its tender offer price is final and will not be revised.
Independent Advice
The independent financial adviser has recommended rejecting the offers, citing that the revised price is lower than Advanced’s estimated valuation range of 229.55 baht to 285.70 baht. Shares of Advanced closed 1.1% higher at 290 baht apiece on Thursday, indicating market confidence in the company’s prospects.
Analysts Weigh In
Varorith Chirachon, head of investment research group at SCB Asset Management, believes that the announcement was expected by the market, and the price of both stocks is higher than the tender offers. Therefore, the boards’ suggestion to reject the tender offer does not pose a significant risk to the proposed merger.
Thaicom’s Resistance
As part of the restructuring, a similar tender offer was launched for Thaicom, under which Gulf Energy, Intouch, and Sarath offered to buy 58.9% of the company at 11 baht apiece. Thaicom has asked shareholders to vote against the deal, citing its rising stock price since the merger announcement as the primary reason. Its shares ended flat at 12.3 baht on Thursday.
Next Steps Uncertain
Intouch and Singtel have yet to respond to requests for comment. As the merger process unfolds, investors will be watching closely to see how these developments impact the future of Thailand’s telecom industry.
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