The Australian satellite unit of Singapore Telecommunications (SingTel) could be set for an IPO after final bids from groups including Intelsat reportedly came in under offer.
Intelsat and a private equity consortium that includes Malaysian satellite…
The Australian satellite unit of Singapore Telecommunications (SingTel) could be set for an IPO after final bids from groups including Intelsat reportedly came in under offer.
Intelsat and a private equity consortium that includes Malaysian satellite operator Measat made offers below the A$2bn (US$1.8bn) reserve price for Optus Satellite, reported Reuters citing sources.
Singtel, Southeast Asia’s largest telco, will decide next week whether to ask the bidders to improve their bids or move ahead with a listing, added the report. It plans to use the proceeds to expand its presence in emerging markets.
A sale would be Australia’s largest telecoms deal in more than a decade and would be a bold step for Intelsat, which has more than US$15bn in long-term debt and made its NYSE debut in April.
Measat’s offer, which is in conjunction with PE firms Blackstone and TPG Capital, is reportedly subject to further due diligence after valuation concerns.
Neither party was able to comment on the speculation.
Credit Suisse and Morgan Stanley, which were hired in March to review Optus Satellite’s options, have put together staple financing worth A$1.7bn (US$1.64bn) to help a deal go through.
However, doubts over Optus Satellite’s earnings potential reportedly led other companies that were rumoured to be interested in the asset – including satellite operator SES and PE firms KKR, Carlyle Group and Providence Equity Partners – to drop out of the running.
France’s Eutelsat was said to be looking at the group, but walked away after making a US$1.14bn offer for Mexican satellite operator Satmex.
The CEO of Optus’ Australian rival NewSat had also expressed interest in teaming up with private equity to make a bid.
With the launch of the Optus 10 satellite later this year, the target will boast a fleet of six spacecraft. It is currently providing interim services for Australia’s National Broadband Network Company (NBN Co), until the PPP tasked with providing universal broadband across the country launches its own birds in 2015.
Singtel has not reported separate earnings for the unit since acquiring its owner Optus in 2001.
