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To: ms.smartest.person who wrote (684)	3/26/2001 6:24:15 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

Lee pulls one out of the hat at last By LINUS CHUA Tuesday 27 March 2001 Lee Hsien Yang had a lot riding on Singapore Telecommunications' success in buying Australia's No. 2 phone company, Cable & Wireless Optus. After two high-profile failures - in Hong Kong and Malaysia - Lee was hard pressed to show investors he could carry off an acquisition. With the up to $20 billion Optus purchase, SingTel's biggest, all but in the bag, the 43-year-old second son of Singapore's founding father, Lee Kuan Yew, can breathe easy. "It's a big brownie point for him," said Chong Yoon Chou, who helps manage $US2 billion ($A4 billion) at Aberdeen Asset Management Asia in Singapore. "It was certainly tough in the past year, given the difficulties of acquiring stakes overseas." Lee, a Stanford graduate, joined SingTel in April 1994 after serving in various command and staff appointments in Singapore's armed forces. He was under pressure to push the company's operations beyond Singapore as the island opened its phone market and competition intensified. So much so that he joked two months ago that he would have to have "a rabbit to pull out of our hat". That he has. Lee's task now will be to integrate SingTel and Optus operations and pursue other acquisitions. "We see terrific growth opportunities for Optus within Australia and for the enlarged SingTel group across the Asia-Pacific region," he said. SingTel became the leading bidder for Optus after rival Vodafone Group plc withdrew its offer on Sunday. Yesterday, Optus said it would cease talks with Telecom Corp of New Zealand and any other rival bidders. The purchase, if successful, will boost South-East Asia's largest phone company's mobile subscribers by more than half and give it a third of Australia's mobile phone market. Still, SingTel's shares tumbled 9.5 per cent yesterday on concern the company may be paying too much. "If you're looking at frontrunners to be a regional carrier, it would be SingTel," said Abhijit Attavar, an analyst at Dresdner Kleinwort Wasserstein in Hong Kong. "There's a price to pay for that, and at the price right now, it's too expensive." SingTel has six million subscribers in Singapore and other Asian nations, such as the Philippines and Thailand. With the Optus offer, it would gain 3.4 million Australian subscribers. "It's good for SingTel to have another revenue base outside of Singapore," said Cheong Kum Hong, chief investment officer at Commerzbank Asset Management Asia, which manages $US600 million in Asia excluding Japan. "But this will also force them to sit down and see how they can digest this, especially if there is another equally big acquisition." Lee's Optus success comes after he failed a year ago to finalise two acquisition attempts. Though SingTel last year invested $US725 million in ventures with Bharti Group, India's No. 1 private fixed-line company, the failures cast a shadow over Lee's record. A year ago, Pacific Century CyberWorks beat SingTel to buy Cable & Wireless HKT, Hong Kong's dominant phone company, offering a cash and stock deal worth up to $US38 billion. That fell to $US28 billion as CyberWorks stock fell. SingTel soon after failed to buy a stake in Time Engineering Bhd, controller of Malaysia's biggest fibre-optic network. Both setbacks stemmed from political concerns because the Singapore government owns almost 78 per cent of SingTel, analysts said. To address that, Singapore said this month it was willing to cede control of some of its largest companies, including SingTel. For Lee, the Optus buy is vindication that he's not just his father's son. -BLOOMBERG This story was found at: theage.com.au