Temasek said to be in talks with Singtel on Intouch stake sale

Temasek Holdings is reportedly discussing with Singtel about selling part of the investment firm's nearly US$2.4 billion (S$3.22 billion) stake in Thailand's Intouch Holdings.
Temasek Holdings is reportedly discussing with Singtel about selling part of the investment firm's nearly US$2.4 billion (S$3.22 billion) stake in Thailand's Intouch Holdings. PHOTO: ST FILE

SINGAPORE (BLOOMBERG) - Temasek Holdings is discussing with Singapore Telecommunications (Singtel) about selling part of the investment firm's nearly US$2.4 billion (S$3.22 billion) stake in Thailand's Intouch Holdings, according to a person with knowledge of the matter.

The parties see an opportunity to strike a deal now given recent evidence of increased political and economic stability in Thailand, the person said, asking not to be identified as the process is private. Temasek, which owns 51 per cent of Singtel, held similar discussions with Singapore's biggest phone company in 2014, though political tensions in Thailand at that time scuttled deal prospects, people with knowledge of the matter said previously.

Thailand's economy expanded 3.5 per cent in the second quarter from a year earlier, beating analyst expectations, and the peaceful completion of a national vote on the constitution on Aug. 7 bolstered investor confidence. Bomb attacks in Thailand's southern provinces late last week, however, will test the resolve of a military government that seized power in a 2014 coup.

The Wall Street Journal earlier reported talks between the two parties. Temasek is Intouch's biggest shareholder with a 41 per cent stake, according to data compiled by Bloomberg. Intouch and Singtel own 40 per cent and 23 per cent, respectively, of Advanced Info Service, Thailand's biggest mobile-phone company, the data show.

"Singtel's stated strategy is to up-stake over time, and where permitted by law eventually consolidate its operations in the region," said Chris Lane, an analyst at Sanford C. Bernstein in Hong Kong. "For Temasek, Intouch has been a great investment, but as growth slows, the outlook for investment returns is reduced."

A Temasek spokesman said by phone that he declined to comment on market speculation, while a representative for Singtel said in an e-mailed statement the company doesn't comment on market rumors.

Temasek last month reported the first decline of its portfolio in seven years as its holdings were battered by last year's market rout. The value of its assets decreased 9 per cent to S$242 billion for its fiscal year ended March 31.