Telecom loses Optus race

By Phil Boeyen, ShareChat Business News Editor

Monday 26th March 2001

One of Australia's most talked about corporate sell-downs reached a final if foregone conclusion today with Singapore Telecommunications confirming its offer for Cable & Wireless Optus.

SingTel has long been the frontrunner for the Optus' assets with Vodafone snapping at its heels and Telecom lagging some way behind.

SingTel has offered the market three options for the acquisition, including a share swap at the rate of 1.66 SingTel shares for every one Optus' share, valued at A$4.57. Other options including a mix of cash and shares, or cash, bonds and shares.

Majority Optus shareholder, Britain's Cable and Wireless, says it has agreed to sell its 19.9% stake in the company to SingTel. C&W wants to focus on providing data services to business customers in the US, Europe and Japan.

Optus boss, Chris Anderson, says SingTel's proposal is 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.

"SingTel's financial strength and track record complement Optus' growth, increasing market share and enhanced profitability."

SingTel expects to dispatch its Bidder's Statement to Optus shareholders within eight weeks.

Telecom chief executive, Theresa Gattung, says Telecom had been interested in Cable & Wireless Optus but only at the right price.

"We will only ever participate in transactions that enhance value for the shareholders of Telecom.

Ms Gattung says Telecom continues to be well positioned to benefit from the anticipated rationalisation of telecommunications in Australia, and is pressing ahead with the development of local, long-distance, mobile and IP operations there.

There's speculation that Telecom may eventually hook up with Hutchison Telecommunications. Hutchison was one of the six company's left bidding for third generation spectrum in Australian after Telecom pulled out of the auction.

Hutchison had also been picked to buy one million Optus customers from Vodafone if Vodafone has successfully bid for Optus.

Telecom continues to be short on specifics for its Australian operations saying only that it "will continue to develop its business presence in Australia, and to assess opportunities for growth through acquisition and alliances."

Comments from our readers

No comments yet