The Government of Thailand aggressively signalled its intention to buy satellite operator Thaicom. This followed news last month that it had instructed the country’s Ministry of Information and Communications Technology (MICT) to establish a legal basis…
The Government of Thailand aggressively signalled its intention to buy satellite operator Thaicom. This followed news last month that it had instructed the country’s Ministry of Information and Communications Technology (MICT) to establish a legal basis for revoking Thaicom’s licence to operate broadcast satellites.
The Thai government’s actions were spurred by transmissions from anti-government protests being broadcast in Thailand through Thaicom’s customer, PTV. Thaicom strongly defended itself, stating that it requested PTV cease broadcasting, but its attempts to stop the transmissions failed. Thaicom ultimately encrypted PTV’s signal so that it could not be received in Thailand.
It was thought that the government would seek a new concession holder, but its statement implies an intention to take a firm, hands-on approach to Thaicom.
Thaicom’s shares, listed on the Thai Stock Exchange, had their largest gain in 12 years after the announcement, rising by a daily 30% limit in Bangkok trading and recouping most of its decline so far this year. However, 41% of the company’s shares are property of Shin Corporation, previously owned by renegade ex-Prime Minister, Thaksin Shinawatra, and are now 96.1% owned by the state investment fund of Singapore, Temasek, and its subsidiaries. Temasek bought Shin Corporation from Shinawatra for US$3.8bn in January 2006.
Shin Corporation shares gained 8.9% against a day increase of 1.5% for the benchmark SET Index following news the Thai government’s latest plan.
Thaicom’s stock was trading at a premium, as under stock exchange rules, if the government or one of its agencies buys Temasek’s stake in Thaicom, it will be required to make a tender offer for the remainder of Thaicom shares at a similar price to what it paid Temasek.
The proposal to buy Thaicom is “really about national security and nothing else,” said Sirichoke Sopha, an aide to Thai Prime Minister Abhisit Vejjajiva. “It’s not about taking out the opposition, because they could use another satellite which has a footprint in Thailand.”
The deal would have to be government-to-government, with the Thais making the purchase either through government-owned MCOT or one of two state enterprises controlled by the Ministry of Information and Communications Technology, Sirichoke said. Authorities may also establish an investment fund to raise money from the general public to purchase the shares, he added. However, it may take some time to price any deal because Thaicom’s book value is about Bt14 a share, double the current market price. Indeed, according to local reports, Vejjajiva has said that the government would pull out of any deal if the purchase price was too high.
Shin Corp executive chairman Somprasong Boonyachai said he was aware of the government proposals but was not involved in any talks directly. “If they can settle this deal, it will be a good thing because it will erase all issues that have annoyed both Thaicom and the government,” he said.
Thaicom declined to comment. Temasek said: “Thaicom is a listed company in its own right, which is 41% owned by Shin Corp. Any sale of Thaicom is a matter for the boards of Thaicom and Shin Corp to consider and decide.”