The Independent Financial Advisor of Thai telecom giants Advanced Info Service Public Company Limited (SET: ADVANC) and Thaicom Public Company Limited (SET: THCOM) have advised investors to turn down the acquisition offers tied to the merger of their parent companies, Gulf Energy Development, Intouch Holdings and Billionaire Sarath Ratanavadi, a major shareholder of GULF.
The merger aims to create a powerhouse valued at 1.037 trillion baht ($30 billion), streamlining operations and leveraging combined strengths. Gulf Energy Development Public Company Limited (SET: GULF), the largest stakeholder in Thaicom, along with Intouch Holdings Public Company Limited (SET: INTUCH), which controls Advanced, announced their merger intentions in July 2024, with the merger already receiving shareholder approval at GULF.
Billionaire Sarath Ratanavadi, Thailand’s fifth-richest individual with a net worth of $15.1 billion, is at the center of this strategic maneuver. GULF holds a 47.4% share in Intouch, followed by Singapore’s Singtel, which owns approximately 25%. The collaboration between GULF, Singtel and ADVANC includes a data center initiative set to begin operations this year.
Gulf Energy’s tender offer for ADVANC is priced at 211.43 baht per share, down from the initial 216.30 baht, an offer that has been deemed final by Gulf, according to the report by Reuters citing a message from GULF’s executive.
Independent financial advice has led advisories for shareholders to reject these offers in an argument of undervalued pricing compared to their estimated valuation at a range of 229.55 to 285.70 baht. ADVANC’s stocks closed at 290 baht on Thursday, reflecting market confidence above the tender estimates.
Singtel has also stated no intention to adjust their offer as well.
Investment insights from Varorith Chirachon of SCB Asset Management indicate that the tender price rejection has little impact on the merger’s trajectory. The high market value of shares surpassing tender offers supports the boards’ recommendation to reject the deal, which is expected by the market.
For Thaicom, similar resistance comes on the back of stock price appreciation post-merger announcement, with shares closing steady at 12.3 baht on Thursday, above the 11 baht tender price proposed for a 58.9% acquisition by Gulf, Intouch, and Sarath. As the merger evolves, market observers and stakeholders are poised to see how negotiations unfold, potentially reshaping the Thai telecom landscape.
