Axiata has agreed to sell its stake in Singapore operator M1 in the buy-out offer from shareholder Keppel. At the terms offered by Keppel in January, Axiata will raise MYR 1.65 billion for its 28.7 percent stake in M1. Axiata said this gives it a gain of MYR 126.5 million on the shareholding.
Axiata first invested in M1 in 2005, and the holding has contributed MYR 1.1 billion in dividends in the past ten years. Axiata said the dividend yield was around 7 percent.
The 30 percent premium offered by Keppel offers a good moment to exit the holding. Axiata said it still believes in the long-term future of M1, but has found in the past year that the company's share price was under-valued. This comes ahead of the entry of a new mobile operator in Singapore.
Furthermore, Axiata said it prefers not to be a minority investor in a privately held company.
Axiata said it will devote the proceeds of the divestment to other priorities. These investments include the modernisation of the group’s IT and network infrastructure, digitisation of its operations across all functions and investments into new growth areas especially in home and enterprise segments, and to a smaller extent, its digital businesses.
Axiata said it also expects to participate in industry consolidation if opportunities arise, and possible acquisitions in new growth areas over the mid- and long-term in some of its footprint countries.
