China Mobile, others approached for buying into Singapore telco M1 -sources

Anshuman Daga

SINGAPORE, April 21 (Reuters) - Top shareholders in

Singapore telecoms company M1 Ltd have approached

potential buyers China Mobile and global private

equity firms, among others, to sell their combined majority

stake in the firm, sources familiar with the matter said.

The three main shareholders of Singapore's smallest listed

telecoms player, who own a combined 61 percent, flagged a

strategic review of their investments last month, and jointly

appointed Morgan Stanley as their financial adviser.

They did not give a reason behind the review of their stake

in the S$1.9 billion ($1.36 billion) company.

The sources said the three shareholders - Malaysia's Axiata

Group, Singapore Press Holdings (SPH) and

Keppel Telecommunications & Transportation - had also

reached out to other telecoms firms, cash-rich business groups

in China and Japanese tech firms to gauge their interest.

First-round bids for M1, long seen as a target due to its

small size and diverse shareholding, are expected in a few

weeks, the sources said. They added that talks between the

parties were still at an early stage and there was no certainty

the process would succeed.

They did not provide details on how China Mobile or the

other prospective bidders have responded to the approach.

When contacted for comments, Keppel, SPH and Axiata referred

Reuters to their joint statement issued last month. M1 referred

the query to its shareholders. China Mobile declined to comment.

The sources declined to be identified as they were not

authorised to speak to the media.

The sale process comes as competition heats up in Singapore,

with Australia's TPG Telecom set to launch its services

next year after winning a licence to become the city-state's

fourth telecom operator. Analysts expect M1 to be the most

vulnerable to new competition.

M1's shares have nearly halved over the past two years due

to its weak business performance amid increased competition.

But Singapore's well-regulated telecoms market offers stable

cash flows. Some telecoms firms could also use the city-state as

a launch pad into a region that is still developing, industry

executives and analysts said.

"It's actually a decent business for current owners or any

new ones if you factor in the upsides," said Rameez Ansar,

co-founder of Singapore firm Circles.Life, which leases towers

from M1, referring to weakness in M1's share performance and

Singapore's position as a tier-one market and high user


M1 could also fit in a portfolio of other telecoms ventures.

"M1 could become part of a portfolio of investments in

telecom-related assets. Someone looking for financial returns

could be interested, if other portfolio companies could help to

enhance M1's overall value," said Gregory Yap, analyst at

Maybank Kim Eng Securities.

Under Singapore's rules, an acquirer of a 30 percent or more

stake in a listed company is required to make an offer to buy

out the rest of the shareholders.

Some of the sources said M1's main shareholders would

require a substantial control premium for the sale to get done.

State-run China Mobile, as well as local peers China Unicom

Hong Kong Ltd and China Telecom Corp Ltd,

the country's big telecoms firms, are pursuing expansion plans

beyond their home market.

If China Mobile acquires M1, it would mark its biggest

overseas foray. The world's largest mobile operator bought an 18

percent stake in Thailand's True Corp in 2014 after

buying Pakistan telecoms firm Paktel in 2007.

($1 = 1.3961 Singapore dollars)

(Reporting by Anshuman Daga; Additional reporting by Jeremy

Wagstaff, Aradhana Aravindan and Sumeet Chatterjee; Editing by

Muralikumar Anantharaman)