First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.
SingTel swoops to win Optus deal
- — 26 March, 2001 14:59
The sum values CWO at $4.57 per share, a premium of 14.5 per cent over its $3.99 closing price on Friday trading on the Australian Stock Exchange (ASX).
The deal still has to be approved by various regulatory bodies, particularly Australia's Foreign Investment Review Board (FIRB), but is otherwise "a done deal" according to a CWO executive who gave a telephone interview on the condition of anonymity.
In a statement to the ASX, Chris Anderson, chief executive of Optus, said SingTel's proposal was a tremendous opportunity for the company, employees and customers.
"With this proposed transaction, Optus will grow from being a successful, highly competitive Australian entity to becoming part of a formidable regional player of stature, significance and strength," he said.
Lee Hsien Yang, SingTel's president and chief executive officer said SingTel's strategy is to take the Optus businesses and services forward and integrate them into SingTel's existing Asian network. SingTel will continue to operate CWO as a full-service provider in the Australian market,and there is clear strategic fit between SingTel's current portfolio and CWO's assets, Lee said in a SingTel statement.
The two companies are an extremely good fit with little geographic or business overlap, according to Bertrand Bidaud, a telecommunications analyst at Gartner Group, in Singapore.
"The deal makes a lot of sense," he said in a telephone interview. "The greater scale will bring advantages in terms of international connectivity and bandwidth. They will also be in a stronger position to deal with content providers and handset vendors. But there won't be much benefit in terms of cost saving."
Of the other two potential bidders, Vodafone Pacific formally withdrew its bid for CWO on Sunday. In a statement, the company said that it couldn't reach a suitable arrangement that would be in the best interests of its shareholders.
Telecom New Zealand has said it will examine the SingTel bid before replying.
"It (Telecom NZ's bid) has always been considered an outsider," the CWO executive said.
The deal will create a company with:
-- fiscal 2000 revenue of $US4.8 billion and pre-tax profit of $US1.1 billion
-- wide service coverage in Singapore, Australia, Hong Kong, India, Indonesia, the Philippines, Taiwan and Thailand.
-- 6.2 million mobile subscribers and 3.7 million fixed-line customers.
-- an extensive Asian data network and infrastructure assets such as the C2C and Southern Cross cables, CWO's national fibre-optic backbone and SingTel's Internet Exchange.
The deal has been carefully structured as a mixture of cash, shares and bonds to avoid burdening SingTel with too much debt.
Optus shareholders can choose to receive:
-- 1.66 SingTel shares (worth $4.57)
-- 0.8 SingTel shares plus $2.25 cash (worth $4.45)
-- 0.54 SingTel shares plus $2.00 cash plus $0.45 SingTel US-dollar-denominated bonds (worth $3.94)
SingTel said the cash element of the deal will be between S$7.25 billion and S$9.25 billion. In March 2000, SingTel had consolidated net assets of S$8.98 billion, according to its annual report.
If the deal is successful, SingTel will seek a listing on the ASX, the company said in its statement.
The principal agency that will have to approve the deal is Australia's Foreign Investment Review Board (FIRB). In the telecommunications sector, FIRB has said that proposals will be dealt with on a case-by-case basis and will normally be approved unless judged contrary to the national interest. SingTel is 78 percent-owned by the Singapore government, a fact that has previously proved an obstacle to its overseas expansion plans.
If the deal goes through, SingTel will in any case face some interesting new challenges on the business and cultural front, according to Bidaud.
"SingTel will be exposed to a very different culture where it will have to be much more transparent and open," he said. "Also, they will be the number two in Australia, not the incumbent, and will have to defend themselves against Telstra."
Any relief in the SingTel boardroom at finally signing a major regional deal after two false starts last year will be short-lived, according to Bidaud.
"It is a completely new ball game for SingTel, and they will have be very aggressive," he said. "But they are aware of the challenges."
Shares of SingTel fell 10.3 per cent to S$2.17 in morning trading on the Singapore Exchange. CWO fell 5.5 per cent on the ASX during the day to $3.76.