Investors react as negotiations for Optus stake sale fail, while Singtel assures long-term commitment to Australian operations.
SINGAPORE: Singtel shares fell by 3.15% to S$2.46 on Wednesday following news that the sale of Optus, its Australian business, will not proceed. Shortly after the announcement, trading was halted pending further updates.
According to Channel News Asia, negotiations regarding the sale of a 20% stake in Optus had concluded unsuccessfully. In response, Singtel cautioned shareholders and potential investors about relying on unofficial reports concerning Optus.
In its statement, Singtel emphasized:
“The group would like to advise shareholders of Singtel and potential investors to exercise caution in their review of any media reports relating to Optus in the absence of any definitive announcements when dealing with the shares of the company.”
Singtel further clarified that Optus remains a core part of its strategy:
“There is no impending deal to divest Optus which remains a strategic and integral part of the Singtel Group.”
Disagreement on Price
Talks reportedly broke down over pricing disagreements between Singtel and Brookfield, a potential buyer. The Australian Financial Review reported earlier rumors suggesting Optus could be sold for A$16 billion (S$14 billion), but Singtel denied this valuation.
Brookfield, initially speculated to be interested in acquiring a 20% stake for approximately A$3.2 billion (S$2.82 billion) to A$3.6 billion (S$3.17 billion), has now confirmed that it will not proceed with the acquisition.
Future Speculations
Despite the halted deal, market speculation persists. Analysts believe Singtel may still explore alternative options for Optus, such as selling a minority stake through an initial public offering. Pressure for such moves intensified after Singtel faced a cyberattack, with speculation pointing to the need for additional capital to enhance its technological capabilities.
Singtel’s long-term commitment to Australia was reiterated in a statement:
“Optus remains an integral and strategic part of Singtel, and we are committed to Australia for the long term.”
Rival TPG Telecom is also reportedly seeking buyers, further heating up competition in the Australian telecom market.
Singtel’s Broader Operations
Beyond Optus and Singapore, Singtel’s portfolio includes smaller stakes in telecom companies such as India’s Bharti Airtel, Indonesia’s Telkomsel, and the Philippines’ Globe Telecom, reflecting its diverse but concentrated regional operations.
At 10:54 am, Singtel issued a request to lift the trading halt, allowing trading to resume as investors await further clarity on the company’s next steps.
