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

Tue Feb 18, 2014 5:54am 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 and has approached its SingTel (STEL.SI: Quote) unit as a possible buyer, people familiar with the matter said.

Heralding an overhaul of its telecom assets, Temasek held talks with SingTel late last year about selling the 41.6 percent of Shin Corp it owns through a subsidiary, the people said. They declined to be identified as the information is not public.

Talks over a stake in the company that controls the biggest Thai mobile telecoms operator and was bought from the family of ousted former prime minister Thaksin Shinawatra have since stalled amid political tensions in Thailand, the people said. SingTel, formally known as Singapore Telecommunications Co, is 52 percent-owned by Temasek.

The move by Temasek, which oversees $170 billion in assets, is in line with its 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 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.

THAI MARKET LEADER

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.   Continued...

 
An employee walks past a Temasek Holdings sign at the company's headquarters in Singapore in this August 2, 2007 file photo. REUTERS/Vivek Prakash/Files