In a move that has captured widespread attention, Gulf Energy Development Public Company Limited (SET: GULF) has announced its plans for a significant merger with Intouch Holdings Public Company Limited, marking one of the most substantial deals to date in 2024.
The merger is set to bring about a shareholding restructure between GULF and INTUCH, particularly with regards to their stakes in Advanced Info Service Public Company Limited (SET: ADVANC). This strategic move will see the newly combined entity directly consolidating ADVANC into its financial reports.
Beyond the shareholding restructuring, the merger will effectively consolidate a diverse array of sectors including energy, infrastructure, satellite, telecommunications, and data centers under one roof.
Notably, with the burgeoning demand in the data center industry, GULF’s energy division is poised to provide crucial support to the data centers, which are highly dependent on substantial power supply.
There will be an allocation of shares in NewCo to the shareholders of GULF and INTUCH in accordance with the following ratios:
(a) 1 existing share in GULF to 1.02974 shares in the NewCo; and
(b) 1 existing share in INTUCH to 1.69335 shares in the NewCo (excluding shares in INTUCH held by GULF, whereas allocation of shares in NewCo shall be made to all shareholders of INTUCH except GULF).
INTUCH’s shareholders will receive continued interim dividend payments from the operation in 1H and 2H, along with a special dividend of THB4.50 per share subsequent to the shares’ conversion into the new entity.
However, for dissenting shareholders who vote against the merger, GULF’s major shareholders have committed to purchasing their INTUCH shares at the last traded price on October 2, 2024.
It’s important to note that the purchaser retains the option to retract this offer should INTUCH’s share price close above THB76 per share, jeopardizing the special dividend for shareholders who remain post-purchasing date. This posts a downside risk for INTUCH as the share price is now trading above the cap price.
The same goes to GULF’s shareholders, which has a price capped at THB45 per share, but it is still trading below the said price.
The move signals a landmark development in the Thailand market, reshaping the landscape for both companies and offering intriguing possibilities for stakeholders moving forward.
NewCo’s energy sector is poised to emerge as the primary source of profits, with its dividend distribution anticipated to be lower than that of INTUCH. NewCo is positioned to be a growth-oriented stock, focusing on expansion rather than being categorized as a dividend stock like INTUCH.
It is expected the Amalgamation to be completed in the second quarter of 2025.
The NewCo is expected to be listed as one of the largest market capitalization in the Thai stock market with a valuation of around 700 billion baht. It will have more mobility in doing business, especially in overseas, compared to other big cap in the Thai stock market such as PTT and AOT that are considered a stated-enterprise company.
