Gulf Energy seeks finance for $5.4 billion takeover of InTouch Holdings


The energy provider looking to acquire InTouch Holdings – owner of Singapore's mobile operator AIS – has said it is ready to apply for a short-term loan to fund the deal.

According to the Bangkok Post, Gulf Energy Development – which already owns 18.95% of InTouch – is also looking at bond issues to complete the acquisition, valued at US$5.4 billion (S$7.2 billion).

The paper said that if Gulf can purchase more than 50% of shares, "it can file a consolidated financial statement so the D/E ratio of the two companies are combined". This would allow it to offer to buyout AIS under Thailand's securities regulation. Intouch owns 40.45% of AIS.

Intouch confirmed on Monday that it had received a conditional voluntary tender offer for all its securities.

"We believe the tender prices are appealing and are hoping for over 50% of shares," said Smith Banomyong, chief of asset management and investments at Gulf Energy, which is Thailand's biggest private power producer by market value.

Banomyong was also quoted as saying: "We see that InTouch is a good platform with diverse companies in its portfolio, whether digital or satellite businesses, e-commerce and other technologies."

That said, reports state Gulf is not interested in satellite operator Thaicom. Instead, Gulf said it will request Thailand's securities regulator to waive the requirement for a tender offer.

If cleared, the deal is expected to be Thailand's second largest every intra-country deal, beaten only by Tesco's $10.6 billion sale of its local grocery operations in Thailand and Malaysia.

The InTouch deal is certainly in touch with the industry's major trends, playing to several patterns of late, not least the recognition of connectivity as critical infrastructure and a sought after investment class, and the digitalisation of major industries and companies.

Hinting at what could be ahead, Banomyong added: "We gave our existing shareholders a reasonable price for both Gulf and InTouch, and if Gulf becomes InTouch's majority shareholder, we have the opportunity to build a synergy between the two companies."

Further, InTouch and AIS's shareholders include Singtel – which responded to the proposed takeover on Monday. It is planning to hire and train more than 500 people for roles in 5G and emerging tech, so the additional funds would be useful.

However, its statement read: "Singtel views its stakes in [Intouch] and [AIS] as strategic investments and we believe in the long-term outlook of the businesses. Singtel is reviewing its strategic options to ensure that [Intouch] and [Advance] shareholders get full benefit of the intrinsic value of the businesses and will, in compliance with the Corporate Disclosure Policy of the SGX-ST Listing Manual, make the relevant disclosures (if any) at the appropriate time. 

“Singtel wishes to advise its shareholders to refrain from taking any action in respect of their shares in Singtel which may be prejudicial to their interests, and to exercise caution when dealing in the shares of Singtel,” it added.

InTouch owns AIS and THAICOM and through its InVent initiative supports "high potential start-up companies by facilitating capital, which is needed for business expansion to the rapid change of the world". The InVent portfolio comprises e-commerce, health tech, fintech, digital media, enterprise and digital life.