Gulf Energy Development's (GULF) tender offer for the shares of InTouch Holdings (INTUCH) is scheduled to end tomorrow and may cause the share prices of INTUCH and Advanced Info Service (ADVANC) to fluctuate in the short term, say analysts.
Gulf made the conditional voluntary tender offer for 81.07% or 2,599.72 million shares of total issued and paid-up InTouch shares on June 29. The offer ends tomorrow and payment is slated for Aug 11.
As of July 27, Gulf has reportedly acquired 9.92% of preliminary tendered shares.
The purchase increased its stake in InTouch to 28.85% from 18.93% before the tender offering, making it the largest shareholder of InTouch rather than Singtel Global Investment which held 21% as of Feb 23.
Suwat Wattanapraporn, an analyst from Asia Plus Securities, said if Gulf becomes the major shareholder of InTouch, the company can expect benefits from ADVANC as it is the core revenue generator of InTouch.
Mr Suwat said Gulf has taken out a loan and used InTouch shares as collateral to finance this tender offer deal.
In the short term, Gulf, as major shareholder, may increase ADVANC's dividend payout ratio and take back dividend money to pay the bank debt.
In the long term, Gulf and ADVANC, as leaders in the energy and telecom sectors, can join hands in businesses and benefit from the synergy in the future, for example, in the development of the electricity digital selling platform which is a long-term plan that Gulf has mentioned.
Pisut Ngamvijitvong, an analyst at Kasikorn Securities, said InTouch's historical prices the past 5-6 years were discounted.
"Given Gulf's current stake in InTouch of 19-25%, we expect its stake will be not less than 50% after the tender offer," he said.
Mr Pisut said if Gulf doesn't disclose the information regarding the offer to the market or arrange an analysts' meeting, InTouch's share price will fall by 15-20% once the tender offer period ends, especially if ADVANC remains at 170.5 baht, reflecting the holding company discount on pricing over the past 5-6 years.
At present, the discount stands at zero as the tender offer is a special event, he said.
Mr Pisut expects Gulf to hold an analysts' meeting after the deal to clarify its integration strategy and to prevent a potential selloff of InTouch shares after the deal concludes.
"There may possibly be deleveraging by more aggressive capital management and a spinoff of assets. They can serve as alternatives to boost ADVANC's share price," he said.