MobileOne Bid Process Approaches a Stalemate
June 7, 2001
Tech Center
By H. ASHER BOLANDEE and LESLIE LOPEZ
Staff Reporters of THE WALL STREET JOURNAL
The bidding process for Singapore's second-largest mobile operator, MobileOne Ltd., is all but stalemated as its shareholders struggle to elicit higher offers in the wake of two disappointingly low initial bids.
"They were nowhere near what shareholders of M1 had hoped for," said an executive directly involved in the process, referring to bids lodged by Malaysia's Maxis Communications Bhd. and the Regional Wireless Co., a 60-40 joint venture between Telstra Corp. of Australia and Hong Kong's Pacific Century CyberWorks Ltd.
The bids were close in value and both in the vicinity of US$1.2 billion, making it difficult for the shareholders to stoke up a bidding war, he said, adding that negotiations so far had failed to produce any change in the situation.
The four companies that own MobileOne announced at the start of April they were jointly putting all of the carrier's equity up for sale, but they have maintained that they would sell only at a reasonable price.
An executive at PCCW -- which already owns 15% of MobileOne, making it potentially both a seller and a buyer -- said the negotiating process could continue for some time. "It's at the beginning of that process now of beating their heads together," the executive said, adding: "They have to do some tough negotiation, so it's going to be heavy going."
The other shareholders are Singapore firms Keppel Telecommunications & Transportation Ltd. and Singapore Press Holdings Ltd., each of which hold 35%, and the U.K.'s Cable & Wireless PLC, which has a 15.3% share.
With the pricing situation deadlocked, noncash conditions attached to the deal may come to the fore in negotiations, analysts said. While some have pointed to tense relations between Malaysia and Singapore as creating a possible political factor, Scott Brixen, a telecommunications analyst with Morgan Stanley Dean Witter & Co., said such concerns were exaggerated. Singapore is trying to be as open as possible following the total liberalization of its telecom market in April last year, he said, making it unlikely that the government would obstruct Maxis's bid.
MobileOne, which broke up Singapore Telecommunications Ltd.'s monopoly when it began operations in 1997, now has more than 850,000 subscribers and said it posted a pretax profit of 79 million Singapore dollars ($43.6 million) in 2000.
-- Puja Rajeev of Dow Jones Newswires contributed to this article.
Write to H. Asher Bolande at hyam.bolande@awsj.com3 and Leslie Lopez at leslie.lopez@awsj.com4.
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