SPH, Keppel T&T shares up on potential sale of M1 stakes

SINGAPORE - Shares of Singapore Press Holdings (SPH) and Keppel Telecommunications & Transportation (Keppel T&T) rose on Monday (March 20) after they resumed trading following news that the two major shareholders of M1 could potentially sell their stakes in the telco.

At 11:12am, SPH was up 1.13 per cent at S$3.57, while Keppel T&T climbed 2.93 per cent to S$1.755.

Shares of M1 also rose, trading 0.91 per cent higher at S$2.21.

M1's three biggest shareholders - Malaysian telco Axiata Group Bhd, Keppel T&T and SPH - confirmed on Friday that they are currently in the midst of conducting a strategic review of their respective shareholdings, which may or may not result in a transaction. The three respectively have 29 per cent, 19 per cent and 13 per cent stakes in M1 for a combined 61 per cent holding.

DBS said in a research note on Monday that while it may be possible that Axiata could look at buying out the stakes of the other smaller partners for full control of M1, all three shareholders may be considering a block sale as well, "though identifying a buyer amid the competitive telecom market dynamics in Singapore could be tough".

It added that Keppel T&T has the most to gain. Given that M1 is not a large proportion of the market caps of SPH and Axiata, the disposal of their stakes in M1 may not have a major impact on their valuations, said DBS. In contrast, Keppel T&T will see the biggest impact as its investment in M1 accounts for 38 per cent of its market value, said the bank.

It added that a sale of Keppel T&T's stake in M1 will also lead to renewed expectations of privatisation by parent Keppel Corp.