Singtel has dismissed Australian Financial Review reports that it is in talks to sell Optus for $16 billion, however their statement hints that talks have taken place, and the issue right now appears to be the price and how much of Optus is sold.
“There is no impending deal to offload Optus for the said sum, as reported,” claims Singtel said in a statement to the Singapore Stock Exchange, however the emphasis appears to be on the word “sum”.
Yesterday we revealed that Optus management has cut a deal with US distributor Likewise, to take over management of supply and products sold in both their franchised and company stores despite the franchised stores outperforming the Company stores three to one.
“Optus remains an integral and strategic part of the Singtel Group and we are committed to Australia for the long term,” the operator group said overnight.
“Our current focus has been on improving network resilience and conducting a CEO search,” Singtel added.
“That said, we regularly conduct strategic reviews of our portfolio to optimise the value of our assets and businesses and will explore all options to maximise shareholder value.”
Analysts believe the sales to Brookfield is on with Singtel looking to better long term and more profitable investments in Asia with the capital raised from a sale of Optus.
A deal of this magnitude would be a boon for shareholders, following recent network failures and hack attacks and the mass sacking of staff.
In the last quarter ending in December 2023, Singtel posted a 12.5% decline in net profit to $S465 million, attributing the slide to a “higher net exceptional loss mainly from Optus and Airtel.”
Singtel sold a 0.8% stake in India’s Bharti Airtel for S$0.95 billion just last week so the business is open to offers.
The recent network failure has already cost the network over A$60 million with Optus also allowing for over $18 million in retrenchment costs after they laid off over 200 people.
Telstra claims it has picked up tens of thousands of Optus following the recent network failure which cost Optus CEO Kelly Bayer Rosmarin her job.
Currently the business is being run by Michael Venter however he claims that he does not want the job full time with the business still head hunting a new CEO.
If the overnight jump in Singtel shares is anything to go by investors are happy with the prospect of a sale.We have become aware
Singtel’s shares rocketed as news of the AFR report filtered through, before the exchange halted trading, awaiting Singtel’s clarification on the story.
This is not the first time this year that Singtel has been linked with some sort of disposal in Australia; the AFR and Bloomberg both reported in January that the telco was looking to offload Optus’s enterprise business, triggering a much stronger denial from Singtel than this latest report drew.
