SingTel Wants to Buy, Retain All of C&W Optus (Update2)
By Mathew Carr
Sydney, Jan. 16 (Bloomberg) -- Singapore Telecommunications Ltd., Southeast Asia's biggest phone company, wants to buy and retain all of Cable & Wireless Optus Ltd., Australia's No. 2 phone company, an Australian Financial Review report said.
A team of at least 50 SingTel representatives has begun inspecting Optus after lodging its offer, the newspaper reported, citing an unidentified company source. A SingTel spokesman declined to comment on the report.
Optus, 53-percent owned by London's Cable & Wireless Plc, wants to sell its consumer mobile, fixed-line and pay-television businesses to focus on more profitable corporate and government customers. SingTel has $3.5 billion in cash on hand and ambitions to build an Asian wide cellular network.
``SingTel is one of the few telecom operators in the world who currently has the cash and the appetite to gobble up a company the size of Optus,'' said Peter Milliken, an analyst at Lehman Brothers Asia Ltd. in Hong Kong.
Telecom Corp. of New Zealand and Vodafone Group Plc, are also inspecting Optus, the Australian Financial Review said. They plan to buy Optus and then sell parts of its business they don't want, the report said.
``There are a number of serious expressions of interest and it is no secret we are in the due diligence phase,'' Optus spokesman Steve Wright said. ``I can't say who or how many.''
Cable & Wireless has said it wants the sale process ended by March 31 though implementation may take longer ``depending on what the sale process yields,'' Wright added.
In Asia, SingTel already owns part of Globe Telecom Inc., the No. 2 cell phone company in the Philippines, Advanced Info Service Pcl, Thailand's No. 1 mobile phone company, and Bharti Group, one of India's biggest cell and fixed phone operators.
SingTel also has a fixed phone line license in Taiwan and shares a $1 billion venture with Richard Branson's Virgin Group to offer cell phone services throughout Asia riding on existing operators' networks. Virgin has a similar partnership with Optus in Australia.
SingTel is being advised by Morgan Stanley Dean Witter & Co. Sydney-based Macquarie Bank Ltd. and Salomon Smith Barney Inc. are advising Telecom.
Other bidders said to be interested in the Optus assets include Japan's NTT DoCoMo Inc., Hong Kong's Hutchison Whampoa Ltd. and Germany's Deutsche Telekom AG.
Chase Ord Minnett, a unit of J.P. Morgan Chase & Co., is advising Optus. Merrill Lynch & Co. is advising Cable & Wireless Plc.
(Australian Financial Review, 1/16)
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