Major shareholders will take advantage of the divestment.
If Keppel Corporation decides to sell off its 19.08% stake in mobile operator M1, then the telco’s other major shareholders will likely be keen to snap up the divested shares.
A report by BMI Research said that Temasek and Malaysia-based telco Axiata Group will be the most obvious buyers of Keppel’s stake.
This is because acquiring Keppel’s stake will allow Axiata to own a controlling stake in M1, which in turn will give it better control over the telco's business direction and assets. Axiata currently holds a 28.32% stake in M1 and lists it as a mobile associate.
Meanwhile, Keppel’s divestment will mean that the Singapore government, which holds stakes in all three operators, will be losing a major stake in the country's smallest operator. This could spur Temasek to decide to re-invest in the company through a different arm.
“Local conglomerate Keppel Corporation is reportedly considering divesting its 19.08% stake in operator M1 as part of the company's move to sell off noncore assets as the company's share price takes a beating from its poorly-performing core business. We believe these two shareholders could consider increasing their stakes in the operator if Keppel does decide to sell off its shares. : In the event that Keppel divests its 19.08% stake in M1, the operator's largest shareholder, Axiata, would be keen to buy the stake to boost its share of profits. The Singapore government could also reclaim its interest in the smallest operator through a different investment unit,” BMI Research noted.
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