[Discussion] Simba acquisition of M1 thread

[Jurong640]

Keppel proposes M1 telco divestment to Simba Telecom for S$1.4 billion​

Keppel announced on Monday (Aug 11) its proposed divestment of M1’s telco business to Simba Telecom for an enterprise value (EV) of around S$1.4 billion.

The consideration will be fully paid in cash, and Keppel will receive close to S$1 billion in cash proceeds for its 83.9 per cent effective stake in M1.

Keppel said Simba Telecom had put forward the strongest bid at an “attractive valuation”, among interested parties. Its combination with M1 is expected to create more revenue pools and career opportunities, considering how they have the least overlap in resources.


The company is expected to receive cumulative cash of over S$700 million with the proposed divestment, coming after an estimated accounting loss of S$222 million excluding transaction costs (assuming the transaction occurred on Jun 30).

The actual loss on divestment to Keppel upon completion, however, will depend on the consideration, which is subject to post-completion adjustments and the carrying value of the assets relating to the proposed sale. This includes goodwill from the acquisition of M1 by Keppel in 2019, to be attributed to the assets of the divestment, at the date of completion.

Keppel first invested in M1 in 1994 as one of its founding members, and continues to retain M1’s information and communication technology business and certain assets excluded from the proposed transaction. It is said to represent an implied valuation of 7.3 times EV/earnings before interest, taxes, depreciation and amortisation.

 

[Jurong640]

Keppel to sell M1 unit’s telco business to Simba for $1.43 billion​

https://www.straitstimes.com/busine...nits-telco-business-to-simba-for-1-43-billion

 

[Jurong640]

 

[froztheart]

Wah, like that means what, M1 gonna be gone and merged into SIMBA branding?

 

[Jurong640]

Wah, like that means what, M1 gonna be gone and merged into SIMBA branding?

let's Welcome SM1BA! The new Lion King has emerged!

 

[BBCWatcher]

Wah, like that means what, M1 gonna be gone and merged into SIMBA branding?

Keppel wants to sell its large controlling ownership interest in M1's telecommunications businesses (not quite all of M1) to Tuas, the corporate parent of SIMBA. That's the only major news so far. Telecommunications companies already routinely offer multiple brands with multiple services, and they can continue doing so if they wish.

 

[froztheart]

Keppel wants to sell its large controlling ownership interest in M1's telecommunications businesses (not quite all of M1) to Tuas, the corporate parent of SIMBA. That's the only major news so far. Telecommunications companies already routinely offer multiple brands with multiple services, and they can continue doing so if they wish.

Yeah, I read the article.
Which is why I asked, essentially it might likely be merged with SIMBA for the mobile side, while Fibre is retained by Keppel?
Unless SIMBA decides to run the same with how SH runs MR, separate entity but streamlining and consolidation of operations, IT systems etc.

 

[BBCWatcher]

Which is why I asked, essentially it might likely be merged with SIMBA for the mobile side, while Fibre is retained by Keppel?
Unless SIMBA decides to run the same with how SH runs MR, separate entity but streamlining and consolidation of operations, IT systems etc.

Keppel and Tuas (SIMBA's parent) have agreed to a transfer of both M1's mobile and fibre Internet Service Provider businesses. Keppel would retain the less consumer visible parts of M1 such as its data center business.

This proposed corporate transaction is subject to review and approval, of course.

 

[Jurong640]

Keppel and Tuas (SIMBA's parent) have agreed to a transfer of both M1's mobile and fibre Internet Service Provider businesses. Keppel would retain the less consumer visible parts of M1 such as its data center business.

This proposed corporate transaction is subject to review and approval, of course.

there is also no say about M1 corporate business mobile and fibre, would they be also part of the sale?

 

[chari-men]

there is also no say about M1 corporate business mobile and fibre, would they be also part of the sale?

They selling the whole Telco business.. retaining only non Telco BU.. basically consumer corporate mobile and fibre gone to Simba...

 

[BBCWatcher]

Wah, like that means what, M1 gonna be gone and merged into SIMBA branding?

let's Welcome SM1BA! The new Lion King has emerged!

Or how about the short and simple “SIM1”?

 

[Jurong640]

Or how about the short and simple “SIM1”?

Huh, SiM1?

 

[TrueB1ue]

Or how about the short and simple “SIM1”?

SIM1SAI ?

 

[froztheart]

Keppel and Tuas (SIMBA's parent) have agreed to a transfer of both M1's mobile and fibre Internet Service Provider businesses. Keppel would retain the less consumer visible parts of M1 such as its data center business.

This proposed corporate transaction is subject to review and approval, of course.

Ahhh, right, it's the business part that was not stated clearly.
Brain omitted the fact that both Mobile & Fibre is sold to SIMBA - Tuas.

 

[froztheart]

Or how about the short and simple “SIM1”?

Honestly, this one sounds good but cliche.

 

[Jurong640]

Honestly, this one sounds good but cliche.

A: Eh, do you know M1 and Simba merged liao?

B: Huh? Simi?

A: Yes.

B: You talking SiM1?

A: Yes

 

[Jurong640]

‘Not the marriage we expected’: analysts surprised by Simba’s acquisition of M1​

The surprising union of M1 and Simba Telecom has left StarHub behind its competitors, analysts said.

The deal defied industry expectations of a StarHub-led consolidation, with Paul Chew from Phillip Securities noting that the market consensus was that M1 would be sold to StarHub.

“The merger will now cause StarHub to fall to third place in Singapore’s mobile market,” noted Chris Muckensturm in a Bloomberg Intelligence report released on Monday (Aug 11).

Missed opportunity for StarHub​

Muckensturm noted StarHub’s low 1.26 times net-debt to earnings before interest, tax, depreciation and amortisation (Ebitda) meant that it was ready for a mobile or enterprise-related merger and acquisition, likely with M1.

In April, Bloomberg said that the merger would have seen StarHub’s sales jump 50 per cent by 2026, far exceeding the consensus’ 3 per cent, noting that a shift towards consumer segment offers timely protection amid global uncertainty.

A Citi report noted that assuming the merger is complete, Simba’s revenue share will rise from its current 6 per cent to 24 per cent, making it on a par with StarHub’s 23 per cent revenue share.

 

[Jurong640]

Telco price undercutting expected to subside after sale of M1 to Simba: Analysts​

https://www.straitstimes.com/singap...r-unlikely-after-sale-of-m1-to-simba-analysts
Simba Telecom’s acquisition of rival M1 is expected to create a stronger competitor to Singtel and StarHub, but do not expect mobile plan prices to change as a result, said analysts.

A price war is unlikely to break out in the near term since current plans are already competitive, said Ms Carmen Lee, head of OCBC Investment Research.

“In a typical merger, the initial period will entail a relook into understanding the combined entity and the potential synergies. We believe pricing strategy will not be an immediate consideration,” said Ms Lee.

Similarly, rivals are unlikely to undercut their prices to win over M1 customers even though it is easy for consumers to switch telcos.

Instead, rival telcos may try to poach these customers with tactics such as bundling mobile and fixed broadband services for a special offer, or through loyalty programmes, said Professor Lawrence Loh of NUS Business School’s department of strategy and policy.
https://www.straitstimes.com/singap...r-unlikely-after-sale-of-m1-to-simba-analysts

 

[chaiscool]

Telco price undercutting expected to subside after sale of M1 to Simba: Analysts​

https://www.straitstimes.com/singap...r-unlikely-after-sale-of-m1-to-simba-analysts
Simba Telecom’s acquisition of rival M1 is expected to create a stronger competitor to Singtel and StarHub, but do not expect mobile plan prices to change as a result, said analysts.

A price war is unlikely to break out in the near term since current plans are already competitive, said Ms Carmen Lee, head of OCBC Investment Research.

“In a typical merger, the initial period will entail a relook into understanding the combined entity and the potential synergies. We believe pricing strategy will not be an immediate consideration,” said Ms Lee.

Similarly, rivals are unlikely to undercut their prices to win over M1 customers even though it is easy for consumers to switch telcos.

Instead, rival telcos may try to poach these customers with tactics such as bundling mobile and fixed broadband services for a special offer, or through loyalty programmes, said Professor Lawrence Loh of NUS Business School’s department of strategy and policy.
https://www.straitstimes.com/singap...r-unlikely-after-sale-of-m1-to-simba-analysts

Cartel agree not to poach haha.

"rivals are unlikely to undercut their prices to win over M1 customers" - they care about consumer account meh? The ones competing are mvno and not main telco. Imo they don't really care enough about consumer biz to compete against each other.

 

[froztheart]

Cartel agree not to poach haha.

"rivals are unlikely to undercut their prices to win over M1 customers" - they care about consumer account meh? The ones competing are mvno and not main telco. Imo they don't really care enough about consumer biz to compete against each other.

SIMBA can cool down on market acquisition for a while if and after the M&A.