M1 telco business will be sold to Simba for S$1.43B, to be fully paid in cash

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Keppel to sell M1 telco business to Simba, will receive close to S$1B in cash

The telecommunications business of local telco M1 will be sold to Simba Telecom in a deal worth S$1.43 billion.

The proposed transaction, to be fully paid in cash, was announced by asset manager Keppel in a media release on Monday (11 Aug).

Keppel to retain M1’s ICT business

Keppel, which owns an 83.9% stake in M1, will receive close to S$1 billion in cash proceeds, it said.

It is thus expected to receive cumulative cash of more than S$700 million with the proposed transaction.

Keppel will retain M1’s fast-growing information and communications technology (ICT) business, which includes its data centres and subsea cables.

The ICT business complements Keppel’s integrated connectivity business, it added.

Source: Keppel (Real Estate Division) on Facebook

However, it is also expected to incur an estimated accounting loss of S$222 million.

Simba put forward ‘strongest bid’ for M1

Simba, which is owned by Tuas, a spin-off of Australian telco TPG Telecom, had put forward the strongest bid among interested parties, Keppel said, adding:

Its combination with M1 is expected to create further revenue pools and career opportunities as they have the least overlap in resources.

In a separate statement to the Australian Securities Exchange, Tuas said it is seeking to raise at least A$416 million (S$348 million) via a placement and share purchase plan.

Source: Google Maps

The rest of the acquisition will be funded by its existing cash, it added.

Deal hoped to be completed ‘over the next few months’

Both Keppel and Tuas said they hope to complete the deal “over the next few months”.

It is subject to certain conditions, including regulatory approval by Singapore’s Infocomm Media Development Authority.

However, the approval of Simba’s shareholders is not required.

M1 & Simba combination can enhance service quality: Keppel CEO

Keppel said the proposed “landmark transaction” should benefit Singapore’s teleco sector and consumers through market consolidation and “harnessing synergies” between two local telcos with “strong track records for innovation”.

Keppel Chief Executive Officer Loh Chin Hua said M1 and Simba are a “highly synergistic combination” which can optimise their infrastructure more efficiently to greatly enhance service quality.