Exclusive: Temasek seeks to sell $3.1 billion stake in Thailand's Shin Corp to SingTel - sources

Tue Feb 18, 2014 12:29am EST
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By Saeed Azhar and Denny Thomas

SINGAPORE/HONG KONG (Reuters) - Singapore state investor Temasek Holdings Pvt Ltd TEM.UL is seeking to sell its $3.1 billion stake in Thai telecom company Shin Corp (INTUCH.BK: Quote), according to people familiar with the matter, and has approached its SingTel (STEL.SI: Quote) unit as a possible buyer.

Temasek, which owns 41.6 percent of Shin Corp through a subsidiary, held talks with Singapore Telecommunications Co, as SingTel is formally known, late last year, said the people, who declined to be identified as the information is not public. Those discussions have since stalled amid political tensions in Thailand, they said.

The move by Temasek, which oversees $170 billion in assets, is in line with the state investor's plans to consolidate portfolio companies in industry groupings. This would be its first move toward bringing its telecoms assets under one roof, analysts said, potentially creating a regional giant.

The Temasek stake in Shin Corp, founded by former Thailand prime minister Thaksin Shinawatra, is worth $3.1 billion by current market value.

Shin Corp's shares now trade more than 50 percent above the price paid in 2006 by a Temasek-led consortium, that included Chinese-Thai businessman Surin Upatkoon, when it bought 96 percent of the Thai firm for a total of $3.8 billion.

"At a fair price such a deal would make sense for SingTel," Chris Lane, senior analyst at Sanford C. Bernstein in Hong Kong who covers Asia-Pacific telecommunications. SingTel is 52 percent-owned by Temasek.

Shin Corp owns 40.5 percent of Thailand's biggest mobile telecoms company, Advanced Info Service Pcl (ADVANC.BK: Quote). SingTel already has a 23 percent stake in AIS: Adding the Shin Corp stake would cement its position in a bigger market and offset sluggish growth in mature economies where it's also present, like Australia.

"SingTel executives are involved in the day-to-day operations of the company AIS," said Bernstein analyst Lane. "Buying the stake from Temasek avoids the possibility of another 'telco' securing a significant interest in AIS."   Continued...

A woman uses a phone at the lobby of a Singtel office in Singapore March 12, 2010. REUTERS/Vivek Prakash