Merger particulars unveiled within the ultimate lap of the deliberate amalgamation of True Company and Whole Entry Communication (DTAC) recommend DTAC’s dad or mum, the Norwegian agency Telenor, might wish to function a passive or strategic investor slightly than run the day-to-day operations of the brand new agency — an indication of a delicate exit from the Thai market.
One main indication is the boards of True and DTAC agreed to name the merged firm True Company, in line with filings submitted to the Inventory Change of Thailand by the 2 corporations on Thursday.
Additionally they nominated True co-president Manat Manavutiveth to be chief govt of the merged agency, whereas DTAC chief govt Sharad Mehrotra was nominated to be his deputy.
The brand new merged agency is prone to be financially more healthy than True is at current, thereby making it extra engaging to inventory traders, notably institutional traders, in line with Kasikorn Securities (KS).
A joint shareholders’ assembly is scheduled for Feb 23 to approve the brand new company construction and different particulars associated to the amalgamation, together with the identify of the merged agency.
An inventory of 11 individuals are going to be proposed because the merged agency’s board of administrators. Suphachai Chearavanont, chief govt of Charoen Pokphand Group — True’s dad or mum — was nominated to be chairman of the brand new agency’s board, whereas Joergen Christian Arentz Rostrup, vice-chair of DTAC’s board, was nominated to be vice-chairman.
The opposite 9 folks put ahead are Kittipong Kittayarak, Kamonwan Wipulakorn, Kalin Sarasin, Pratana Mongkolkul, Gao Tongqing, Adhiruth Thothaveesansuk, Tone Ripel, Lars Erik Tellmann and Teerapon Tanomsakyut.
An allotment of 34.5 billion strange shares of the merged agency goes to be provided to shareholders with a par worth of 4 baht per share. One present share of True will grow to be a 0.60018 share of the brand new agency, and one present share of DTAC will grow to be 6.13444 shares of the brand new firm.
The amalgamation transaction is anticipated to be accomplished within the first quarter this 12 months.
Nakul Sehgal and Yupa Leewongcharoen, the chief monetary officers of DTAC and True, respectively, had been nominated to be the co-chief monetary officers of the brand new agency.
STRATEGIC INVESTOR
Pisut Ngamvijitvong, senior fairness analysis analyst at KS, stated the names proposed for the board of administrators and administration are anticipated to symbolize an equal partnership between representatives of DTAC and True.
Nevertheless, the 2 corporations’ choices relating to the identify of the brand new agency and its senior management recommend Telenor might want to grow to be “a passive operator or a strategic investor” slightly than coping with day-to-day operations within the Thai market, he stated.
“Telenor’s representatives are anticipated to fill positions associated to procurement and finance within the merged agency and concentrate on dividends or return on funding,” Mr Pisut stated.
The transfer displays an early signal that Telenor might want to exit the Thai market, though which will take time, he stated.
“All of the agenda objects are prone to sail by means of the joint shareholders’ assembly with ease as Telenor, CP and China Cell symbolize 70% of the votes,” Mr Pisut stated.
ATTRACTIVE STOCK
In response to KS, True is anticipated to e-book a web lack of 4 billion baht, whereas DTAC is anticipated to achieve 1 billion baht in web revenue for 2022.
The brokerage estimates Superior Data Service will attain practically 30 billion baht in web revenue for 2022.
The brand new merged agency is prone to profit from a bigger spectrum capability portfolio, extra service retailers and synergy approaches, which might strengthen its monetary standing.
“The merged agency’s inventory ought to be engaging for traders. At current, main cellular operator AIS seems to be the only inventory within the telecom section attracting curiosity from traders,” Mr Pisut stated.
KS stated in its report it has a constructive view on this merger growth after the deal completion was delayed a number of occasions.
The readability removes market nervousness that the deal may be cancelled or face an indefinite delay, which has weighed on the share costs of DTAC and True for a while, stated the brokerage.
KS’s report said it will not be stunned if some traders determine to take earnings as soon as the share costs exceed the earlier highs of 51.25 baht per share for DTAC and 5.7 baht for True (as of Feb 18, 2022).
“We’re considerably apprehensive the share swap transaction, which retains shares untradeable for a interval of 9 buying and selling days, might set off a selloff by institutional traders earlier than the final buying and selling day,” the KS report famous.
“The goal costs for DTAC and True are 58.43 baht and 6.28 baht, implying a goal value for the merged agency of 10.32 baht,” KS stated.
It could take one or two years for the combination of DTAC and True into the merged agency by means of cultural and organisational administration restructuring, KS stated.