Keppel Corporation and Singapore Press Holdings (SPH) yesterday announced their "firm intention" to make a voluntary general offer of $2.06 per share for the remaining M1 shares that they do not own.
This will be done via joint venture company Konnectivity, which is majority owned by Keppel, they said in an exchange filing.
M1 is Singapore's third-largest mobile operator. Keppel and SPH are long-term shareholders of M1.
The two companies had announced their intention in September to make the offer, subject to the precondition of approval from the Infocomm Media Development Authority.
Yesterday, the companies said that the precondition has been satisfied. The offer will become unconditional when Konnectivity and its concert parties obtain more than 50 per cent of the issued share capital of M1 by the close of the offer.
The offer price represents a premium of 36 per cent over the lowest closing price of $1.52 over the 52-week period preceding the last trading date and a premium of 25 per cent over equity research analysts' average target price per share of $1.644.
Currently, Keppel Corp owns 19.3 per cent of M1 through its subsidiary Keppel Telecommunications & Transportation, while SPH has a 13.45 per cent stake.
Keppel had previously said that the offer to gain majority control of the telco is a strategic initiative to drive business transformation, such as the digitalisation of M1's operating platform.
Meanwhile, SPH had said that it is supporting Keppel in the offer due to the "potential for long-term value creation" of M1, in light of the transformation initiatives that are slated to be carried out.
The companies noted in yesterday's filing that M1 faces intensifying competition from the upcoming launch of a fourth mobile network operator, TPG Telecom, as well as new mobile virtual network operators here.
Hence, continuing the status quo risks stagnation and further decline in shareholder value, they said.
Keppel shares closed up 5 Singapore cents, or 0.855 per cent, at $5.90 yesterday before the announcement. SPH shares closed unchanged at $2.35.