StarHub down 6.6% as M1 sale to Simba dashes hopes of its takeover of the telco
The stock on Monday hit an intraday low of S$1.14, 6.6% below its prior closing price of S$1.22 on Friday
[SINGAPORE] Shares of telco StarHub fell by more than 6 per cent on Monday (Aug 11) after news of Keppel’s proposed sale of M1 to Simba Telecom, one of the latest entrants to Singapore’s telco scene.
This has dashed hopes of a potential StarHub takeover of M1, which was rumoured to be on the cards as far back as 2020. Simba has reportedly been gaining ground against incumbent mobile network operators.
As at 4.31 pm, the stock fell to S$1.14, its lowest price since Jun 25, ShareInvestor data showed. With around 8.7 million shares changing hands, it was 6.6 per cent or S$0.08 below its S$1.22 closing price on Friday.
It finished Monday at S$1.16, down by 4.9 per cent or S$0.06, with some 9.1 million shares transacted.
On Monday, Keppel announced the proposed divestment of its telco business M1 to Simba – which put forward the strongest bid among interested parties, at an “attractive valuation”, the asset manager said.
With an enterprise value of around S$1.4 billion, the proposed sale would result in Keppel receiving close to S$1 billion in cash for its 83.9 per cent effective stake in M1.
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The asset manager will retain M1’s information and communication technology business and certain assets excluded from the proposed transaction.
Chatter about Keppel selling its consumer mobile business has been long ongoing, with talk of a potential M1 and StarHub merger circulating on and off since 2020.
Manjot Singh Mann, the chief executive of Keppel’s connectivity segment, highlighted at the company’s recent earnings briefing on Jul 31 that the telco market is saturated – with four operators and around seven mobile virtual network operators.
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Keppel, at its H1 earnings release, announced plans to monetise some S$14.4 billion of non-core assets to unlock value.
This comes as part of its plans to accelerate the growth of ‘New Keppel’ and its transformation into a global asset manager and operator.
Simba first started out in 2020 under the name TPG Singapore, offering a S$10 a month plan that came with 50 gigabytes of data, before its 2022 rebrand.
The telco has grown from serving 487,000 subscribers at the end of H1 FY2022 to 1.1 million subscribers as at H2 FY2024, according to a January report from mobile network analytics company Opensignal.
Keppel first invested in M1 in 1994 as one of its founding members.
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