M1 Deal Hangs in Balance as Keppel, Singapore Press Stand Ground

(Bloomberg) -- A buyout offer for M1 Ltd. four months ago still doesn’t have the backing of a bulk of shareholders. And yet, Keppel Corp. and Singapore Press Holdings Ltd. have refused to budge on the initial offer price.

The second- and third-largest shareholders of M1, Singapore’s smallest mobile-services provider, said in an exchange filing on Tuesday that they won’t increase their S$2.06 ($1.51) per share take-private offer price “under any circumstances whatsoever.” Instead, they’ve extended the closing date for the offer by two weeks to Feb. 18, giving investors more time to consider tendering their shares.

As of Monday, Keppel, whose businesses include property, infrastructure and oil-rig construction, and newspaper publisher SPH had a joint 34.35 percent stake in M1. Both companies don’t even need top shareholder Axiata Group Bhd to tender its 28.67 percent stake in M1 for the deal to go through. Through their joint firm Konnectivity Pte. Ltd., Keppel and SPH have obtained a waiver from the Singapore Exchange that allows them to take M1 private without Axiata, according to a Jan. 7 statement. That’s on the condition that the shareholding of the public float exceeds 90 percent.

The waiver was obtained to ensure shareholders are “provided with an opportunity to exit” and wouldn’t have to hold their shares for an indefinite period should less than 75 percent of investors agree to the deal, the statement said.

Keppel and SPH’s announcement came on the back of M1 directors recommending shareholders to accept the offer in a statement after market close on Monday. M1’s share price fell as much as 1 percent to S$2.05 as of 11:54 a.m. in Singapore.

Sell-side analysts seem to agree that this offer may be in the best interest for shareholders. Even before Tuesday’s announcement, analysts at Citigroup Inc. said investors should tender their shares as there is a low chance of a counter offer by Axiata. The firm isn’t the only one. Analysts at Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. have also urged shareholders to accept the offer.

M1 Deal Hangs in Balance as Keppel, Singapore Press Stand Ground

With one of the deepest rates of mobile penetration in the world, Singapore has more devices than people. The purchase would give Keppel and SPH free rein to overhaul a carrier whose stock and earnings have languished as it faces increasing threats in Singapore’s congested mobile industry.

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