The major shareholders can use divestment gains to reinvest.
M1's major shareholders have ended their strategic review on the divestment of their stakes in the telco.
Axiata, Keppel T&T, and SPH said in their announcement that proposals from potential investors did not meet the minimum criteria and parameters determined by the majority of shareholders.
"We understand that the potential investors did not pull out. However, the three largest shareholders failed to reach a consensus on selecting the preferred bidder. Recent intense scrutiny on overseas deals by the authorities in China could have also made the decision more complicated than usual," UOB Kay Hian analyst Jonathan Koh said.
However, Koh reckons that the strategic review could resurrect in the future.
"Axiata could raise funds by divesting its stake in M1 for re-investment in high-growth emerging markets, such as India. Keppel T&T, as part of conglomerate Keppel Corp, could undergo restructuring. The telecommunications business is not a core business for SPH," Koh explained.
He added, "We would not rule out an industry consolidation over the longer-term as well."
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