Axiata Group (Axiata) has entered into an agreement with Samart
Corporation (Samart) to dispose its entire stake of 24% of Samart
i-Mobile (SIM) for a total gross consideration of USD88.6m (or
RM283.5m). SIM is a distributor of mobile phones & mobile content in
Thailand, while Samart is the major shareholder of SIM. The news of
Axiata disposing its stake in Samart i-Mobile is not new as newswires
had reported on the potential deal more than two weeks ago. We are
neutral on the disposal as we believe the disposal of non-strategic
assets such as its stake in SIM will enable Axiata to better focus on
its core business but the selling price of THB2.73/share (13.6% discount
to last closing price of THB3.16/share) was slightly below our
expectations. We maintain our Neutral call on Axiata with an unchanged
target price of RM6.92.
Disposal of 24% stake in Samart i-Mobile for USD88.6m. Under the agreement signed, Axiata will sell 1.05bn shares or 23.93% of SIM for THB2.87bn (THB2.73 per share) or USD88.6m. The selling price of THB2.73/share was slightly below our expectations, and represented a 14% discount to SIM‟s closing price of THB3.16 and valuing SIM at P/E of 14.3x (2013) or 11.9x (2014F). SIM is involved in the distribution of mobile phones & accessories and provision of wireless information services & mobile content in Thailand. Axiata has held the stake in SIM since 2006, and the divestment is line with the group‟s intention to exit from non-core businesses and to focus on its core business of mobile communications. The deal is expected to be completed within 30 days from the date of agreement. The deal has no material financial impact on Axiata, but would help to strengthen its balance sheet after it provided an USD500m shareholder‟s loans to XL Axiata (XL) for PT Axis acquisition.
XL to sell part of its telecommunications tower portfolio in 2H2014. On a separate note, XL has announced its intention to sell a part of its telecommunications tower portfolio through a tender process in second half of 2014. The disposal will enable XL to monetise its assets (in particular, the overlapping assets from acquired PT Axis), while the proceeds from the disposal of telecommunication towers will used to pare down XL‟s debt.
Neutral with target price of RM6.92. We reiterate our Neutral call on Axiata with a target price of RM6.92 based on sum-of-parts valuation. While we like Axiata‟s regional growth plans and potential IPO of its tower assets (likely to be in 2015), we believe forex volatility and XL‟s integration with loss-making Axis may affect the group‟s near-term financial performance.
Source: PublicInvest Research - 3 Jul 2014
Disposal of 24% stake in Samart i-Mobile for USD88.6m. Under the agreement signed, Axiata will sell 1.05bn shares or 23.93% of SIM for THB2.87bn (THB2.73 per share) or USD88.6m. The selling price of THB2.73/share was slightly below our expectations, and represented a 14% discount to SIM‟s closing price of THB3.16 and valuing SIM at P/E of 14.3x (2013) or 11.9x (2014F). SIM is involved in the distribution of mobile phones & accessories and provision of wireless information services & mobile content in Thailand. Axiata has held the stake in SIM since 2006, and the divestment is line with the group‟s intention to exit from non-core businesses and to focus on its core business of mobile communications. The deal is expected to be completed within 30 days from the date of agreement. The deal has no material financial impact on Axiata, but would help to strengthen its balance sheet after it provided an USD500m shareholder‟s loans to XL Axiata (XL) for PT Axis acquisition.
XL to sell part of its telecommunications tower portfolio in 2H2014. On a separate note, XL has announced its intention to sell a part of its telecommunications tower portfolio through a tender process in second half of 2014. The disposal will enable XL to monetise its assets (in particular, the overlapping assets from acquired PT Axis), while the proceeds from the disposal of telecommunication towers will used to pare down XL‟s debt.
Neutral with target price of RM6.92. We reiterate our Neutral call on Axiata with a target price of RM6.92 based on sum-of-parts valuation. While we like Axiata‟s regional growth plans and potential IPO of its tower assets (likely to be in 2015), we believe forex volatility and XL‟s integration with loss-making Axis may affect the group‟s near-term financial performance.
Source: PublicInvest Research - 3 Jul 2014
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