Singapore Telecommunications has one last hurdle to cross before gaining control of the mobile business of Cable & Wireless Optus, Australia's second largest telco.
Parent company Cable & Wireless (C&W) now has to convince its other shareholders to sell the remaining 32.6 percent Optus stake to SingTel.
C&W previously owned a total of 52.5 percent in Optus. The remaining shares are held by the public as Optus is listed on the Australian Stock Exchange.
"Cable & Wireless has the obligation to pay SingTel US$100 million if they do not sell the remaining 32.6 percent to us," said SingTel Mobile CEO Lucas Chow in a media conference call last night.
Telecom NZ is also interested in buying Australia's No 2 phone company, while the UK's Vodafone Group quit the bidding Sunday, saying regulatory hurdles were too high.
For each Optus share, SingTel is offering three options:
1) 1.66 SingTel shares;
2) 0.8 SingTel shares and AU$2.25 in cash; or
3) 0.54 SingTel shares, AU$2.00 in cash and AU$0.45 in SingTel US-dollar denominated bonds
The first option values each Optus share at AU$4.57 based on SingTel's closing share price of S$2.42 last Friday (at an exchange rate of AU$1 to S$0.88).
It offers a 20.1 percent premium on Optus's price of AU$3.80 on March 9, the last trading day before SingTel submitted its final expression of interest.
The second option puts a value of AU$4.45 on each Optus share, a 17.1 percent premium. The last alternative values each Optus share at AU$3.94, a 3.6 percent premium.
The three options are extended to all Optus shareholders as SingTel is looking to acquire 100 percent of the Australian telco.
"The effective purchase price per share range of AU$3.94 to AU$4.23 implies an equity purchase price range of AU$14.9 billion to AU$16 billion," SingTel said in a statement.
