Singapore operator M1 has received a buy-out offer from two of its main shareholders, Keppel and Singapore Press Holdings. They are offering SGD 2.06 cash per share, equal to a premium of 30 percent on the weighted average price in the past month and 7.6x the company's EBITDA.
Taking M1 private and making it part of a bigger group is expected to help the company compete better in the increasingly competitive Singapore market, which will soon get a fourth mobile operator. Keppel also wants to integrate M1 more with its other business activities in city development, utilities and infrastructure, where there is a growing focus on connectivity. Simultaneous with the M1 bid, it has launched an offer to buy out the other shareholders in its unit Keppel Telecommunications & Transport.
The offer is conditional on the bidders acquiring at least 50 percent of M1's shares and receiving regulatory approval. M1's other main shareholder is Malaysian operator Axiata, with a 28.7 percent stake. Keppel already owns 19.3 percent of M1, and Singapore Press Holdings has 13.5 percent.
While Axiata did not immediately release a statement on Keppel's offer, a person familiar with the matter told Reuters that the Malaysian company is likely to reject the bid as too low. Axiata is in talks to team up with private equity firms and other companies on its own offer for a bigger stake in M1, the report said.
