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