Thai billionaire Sarath Ratanavadi unveiled a plan to consolidate his energy and telecom businesses by merging his listed power company with the owner of the nation’s most-valuable mobile phone operator.
Gulf Energy Development (Gulf) will merge with its telecom unit Intouch Holdings (Intouch), the companies announced in separate statements. Existing shareholders of Gulf will receive 1.02974 shares of the merged entity, while Intouch holders will get 1.69335 shares for every stock held, the companies said. Gulf owns about 47.4% stake in Intouch.
The combined market value of the two companies was $20.5 billion at Tuesday’s closing price in Bangkok.
Mr Sarath, ranked as the second-richest Thai with a net worth of US$9.8 billion, is restructuring his businesses focused on everything from renewable energy to telecom and data centers just three years after gaining control of Intouch. The revamp will allow the group to maximise benefits for future operations and investments, simplify shareholding structure and cultivate new growth opportunities in the energy and infrastructure and digital landscape, Gulf said.
“The combined expertise will benefit both companies and all stakeholders, increasing the potential of the new company to be a leader in the energy and telecommunications business,” Mr Sarath said in the statement. The company will expand its energy portfolio into the renewable sector and also focus on significant digital expansion as announced from time to time, he said.
Singtel support
Gulf, Intouch and Singtel Strategic Investments and Mr Sarath will make a tender offer for 36.25% of mobile carrier Advanced Info Service (AIS) at 216.30 baht a share each. The offer price is below AIS’s closing price of 220 baht on Tuesday.
Singapore Telecommunications (Singtel) said in an exchange filing that it supported the amalgamation between Gulf and Intouch. The restructuring will simplify Singtel’s shareholding in its Thai associate Advanced Info by removing Intouch as the intermediary holding company, it said. Currently, Singtel holds 24.99% in Intouch while Intouch holds 40.44% in AIS, it said.
Singtel is set to get about 9% stake in the new company and the company will also book a gain of S$400 from the amalgamation, it said.
As part of the restructuring, Gulf, Intouch and Mr Sarath will also offer to buy 58.9% of Thaicom, a satellite operator at 11 baht apiece.
The board of directors of Intouch also gave an in-principle approval for a special dividend payout of 4.5 baht per share from its retained earnings, the company said.
The restructuring is expected to be completed in the second quarter of next year subject to all regulatory approvals. Bualuang Securities and UBS AG were advisers to Gulf on the transaction.