By Rishav Chatterjee
(Reuters) -The boards of Thailand-based mobile carriers Advanced Info Service and Thaicom have asked investors to reject offers to acquire the firms under the merger of their respective controlling entities, the companies said on Thursday.
In July 2024, power producer Gulf Energy Development, the largest shareholder of Thaicom, and Intouch Holdings, which controls Advanced, announced their intent to merge to create a new company for maximizing benefits for both the firms and improving operations and investments.
A merger of Gulf and Intouch, already approved by shareholders of Thai billionaire Sarath Ratanavadi’s power company, would create a new entity valued at 1.037 trillion baht ($30 billion).
Sarath has a net worth of $15.1 billion according to Forbes and is the country’s fifth richest person.
Gulf owns about 47.4% stake in Intouch, followed by Singapore Telecommunication (Singtel) which has an around 25% interest.
Gulf has a joint venture with Singtel and Advanced to set up data centres locally and is expected to begin operations this year.
A tender offer was launched for Advanced, by Gulf Energy, Intouch and Singtel, valuing the firm at 216.30 baht per share, with the offer later being lowered to 211.43 baht.
Gulf, in an emailed response to Reuters said its tender offer price was final and it does not intend to revise that.
The independent financial adviser’s recommendations to reject the offers will not impact the merger process, Gulf added.
Advanced said its financial adviser found the revised price to be lower than its estimated valuation range of 229.55 baht to 285.70 baht.
Shares of Advanced closed 1.1% higher at 290 baht apiece on Thursday.
A Singtel spokesperson told Reuters that the firm does not intend to revise its offer either.
“The announcement by both the companies was expected by the market. The price of both the stocks are higher than the tender offers and so the boards suggested investors to reject the tender offer. This does not post a major risk to the proposed merger,” said Varorith Chirachon, head of investment research group at SCB Asset Management.
As part of the restructuring, a similar tender offer was launched, under which, Gulf Energy, Intouch and Sarath offered to buy 58.9% of Thaicom at 11 baht apiece.
Thaicom said its rising stock price since the merger announcement is the primary reason it is asking shareholders to vote against the deal.
Its shares ended flat at 12.3 baht on Thursday.
($1 = 34.5700 baht)
(Reporting by Rishav Chatterjee in Bengaluru; Additional reporting by Aaditya Govind Rao; Editing by Mrigank Dhaniwala and David Evans)
