Singtel on Friday rejected the offer made by billionaire Sarath Ratanavadi’s Gulf Energy to buy the Singapore-based telco’s stakes in InTouch Holdings and its unit Advanced Info Service (AIS), Thailand’s biggest mobile-phone carrier.
“Singtel believes that AIS tender offer significantly undervalues the fair value of AIS,” Singtel said Friday in a statement to the Singapore Exchange. “Singtel does not intend to accept the AIS tender offer.” Singtel’s rejection comes after AIS’s financial adviser said two weeks ago that Gulf Energy’s offer was too low.
Singtel also doesn’t intend to accept Gulf Energy’s offer for AIS parent InTouch because it considers the investment as strategic. The company, which is Southeast Asia’s biggest telco, owns 21.2% of Intouch and 23.3% of AIS.
“The rapid pace of digital transformation in the country presents significant 5G opportunities in both the consumer and enterprise space,” Singtel said. “As a major shareholder in Intouch and AIS, Singtel will continue to contribute its telecommunications and digital expertise to reinvigorate their core businesses.”
Gulf Energy had in April offered to buy the remaining 81% of InTouch that it doesn’t own for 169 billion baht ($5.1 billion). It’s separately offered 365 billion baht to buy AIS.
Singtel said it’s looking forward to working with Gulf Energy, which has complementary strengths and a shared vision to forge InTouch and AIS’ leadership in 5G and digital services.
With 43 million subscribers across Thailand, AIS can leverage its position to build a digital ecosystem and grow business-to-business digital services while enhancing the value of the company’s infrastructure assets, which have yet to be unlocked, Singtel added.
Hungry for growth, Gulf Energy has been diversifying the company’s portfolio with investments in green energy, toll roads and ports. Telecoms looks like the right call: Gulf’s first-quarter core profit climbed 158% to 2.4 billion baht from a year ago, bolstered partly by dividends from Intouch.
Sarath, 56, is the controlling shareholder of Gulf Energy. With a net worth of $8.9 billion, he was ranked No. 5 on the list of Thailand’s 50 Richest that was published last month.