Thai billionaire plans $7.2 billion buyout of Singtel associate Intouch

MONDAY, April 19, 2021

BANGKOK (BLOOMBERG) - Gulf Energy Development, Thailand's biggest power producer by market value, has offered to acquire Intouch Holdings, a Singtel associate company that control's the nation's largest mobile phone operator, for as much as 169 billion baht (S$7.2 billion).

Gulf Energy, controlled by billionaire Sarath Ratanavadi, offered to buy 2.6 billion shares, or about 81 per cent of Intouch, that it does not already own at 65 baht each, it said in an exchange filing on Monday (April 19). The offer price is 11 per cent higher than Intouch's close on Friday.

Gulf Energy will also tender for 100 per cent of Advanced Info Service, Thailand's biggest mobile phone company controlled by Intouch, at 122.86 baht each. The Advanced Info offering will be subject to Gulf Energy securing at least 50 per cent of Intouch, it said.

Singtel is the biggest shareholder of Intouch after acquiring a 21 per cent stake from Singapore investment company Temasek in 2016. Former Thai prime minister Thaksin Shinawatra sold Intouch - then named Shin Corp - to Temasek in 2006, sparking public criticism. Singtel also owns about 23 per cent of Advanced Info, according to stock exchange data.

In a statement to the Singapore Exchange at 1.02pm on Monday, Singtel said it views its stakes in Intouch and Advanced Info as strategic investments, and believes "in the long-term outlook of the businesses".

Singtel said it is reviewing its strategic options to ensure that Intouch and Advanced Info shareholders "get full benefit of the intrinsic value of the businesses".

It added that it will make the relevant disclosures, if any, at the appropriate time. It also advised its shareholders to refrain from taking any action in respect of their shares in Singtel that may be prejudicial to their interests, and to exercise caution when dealing in the shares.

Singtel shares were trading up six cents or 2.35 per cent at $2.61 as at 1.13pm on Monday, after the announcement of the Intouch buyout offer.

While Intouch shares jumped as much as 9 per cent in Bangkok on Monday, the most since March 2020, Gulf Energy tumbled as much as 5.3 per cent to its lowest level since November.

Mr Sarath, 56, Thailand's second-richest person, has expanded his 10-year-old energy company into deep-sea port, tollway and telecommunication businesses, as well as power projects in Vietnam, Oman and Germany. Acquisitions of Intouch and Advanced Info will generate long-term benefits from their potential and cash flows as Thailand's leading telecommunication companies, Gulf Energy said.

Gulf Energy's proposed acquisition of Intouch would be Thailand's third-biggest buyout deal, according to data compiled by Bloomberg.

Mr Sarath, Gulf Energy's chief executive officer, has a net worth of about US$9 billion (S$12 billion), most of which comes from his and his family's stake in the power producer, according to Bloomberg Billionaires Index.

Gulf Energy will finance the acquisitions of Intouch and Advanced Info from cash flow and bank loans, according to the company's statement. Shareholders will hold a meeting on June 25 to consider the proposed acquisitions.

Most of Intouch's earnings come from Advanced Info and Thaicom, the nation's biggest satellite operator. It also invests in technology start-ups. Gulf Energy will request that the regulator waive a mandatory requirement to make a tender offer for Thaicom, it said.

Thaicom shares surged as much as 9.2 per cent, while Advanced Info fell 0.6 per cent as at 10.41am in Bangkok.