Temasek Buys 96.1% of Shin Corp. in Thai Takeover

Temasek Holdings Pte, the Singapore government's $63 billion investment unit, acquired 96.12 percent of Thailand's Shin Corp. in a transaction which may de-list the company, and deepened a political crisis in Thailand.

Temasek, through its units Aspen Holdings Ltd. and Cedar Holdings Ltd., bought the shares under a tender offer of 49.25 baht ($1.26) each for the stock it didn't already own, the units said today in a filing to Thailand's Securities & Exchange Commission. The offer, which expired March 9, came after it acquired 49.6 percent of Shin from the family of Thai Prime Minister Thaksin Shinawatra on Jan. 23.

Cedar also holds 159.1 million warrants, which could raise its holding in Shin to 96.31 percent, according to the statement.

The controversial acquisition spurred street protests and calls for the resignation of Thaksin, who dissolved Parliament and called elections for April 2. Opposition parties are boycotting the polls. Critics of the deal were angered by the tax-free $1.9 billion Thaksin's family netted from the sale to Temasek, and by the prospect of foreign ownership of Shin Corp.

The high level of acceptance of the tender offer may de- list Shin unless Temasek issues new shares or sells part of its stake to retail investors to meet the Stock Exchange of Thailand's 15 percent free-float requirement.

De-Listing?

``Offerers have no intention to de-list the company's shares from the SET during the 12-month period after the end of the tender offer period, unless the company is unable to maintain its listing status under the regulations required by the SET,'' Shin said in a statement to the exchange on Feb. 22. Aspen and Cedar made a similar statement in a Feb. 1 filing.

Temasek spokeswoman Eva Ho would not immediately comment on the size of the tender acceptance or de-listing plans today. Kittiratt Na-Ranong, president of the Stock Exchange of Thailand, didn't immediately return calls to his mobile phone.

Shin Corp., founded by Thaksin, controls Advanced Info Service Pcl (ADVANC), Thailand's biggest mobile-phone company, Shin Satellite Pcl, Thailand's only satellite operator and ITV Pcl (ITV), a Thai television network.

Shin also partly owns Thai AirAsia, a low-cost carrier, and co-owns Capital OK Co., a consumer-finance company, with Singapore's DBS Group Holdings Ltd. (DBS) Singapore Telecommunications Ltd. (ST), which is controlled by Temasek, holds about 1.08 percent of Shin Corp.

Shin shares closed 3.7 percent lower at 45.25 baht at 4:30 p.m. in Bangkok, and have fallen 6.2 percent since Temasek bought control in January. A Temasek tender offer of 72.31 baht a share for Advanced Info stock expires March 21. The mobile- phone company rose 2.1 percent to 95.5 baht. Its stock has fallen 8.2 percent since the Shin deal. ITV rose 4 percent, to 10.3 baht today, falling 13.5 percent since the takeover. Shin Satellite today rose 1.7 percent to 11.8 baht, and has lost 24 percent since Jan. 23.

Protests Escalate

Anti-Thaksin protests continued today, leading the premier to warn he is ``ready'' to declare a state of emergency if violence breaks out. More than 30,000 marched on his office early this morning and thousands stayed and protested around the compound today, watched by almost 5,000 police officers.

``He is selling assets to foreigners, concessions that belong to the people,'' said Somchai Jong-Saeng, 46, a Bangkok architect who has attended nightly rallies for the past 11 days with his wife. He returned to work after lunchtime and plans to re-join protesters tonight. ``He is selling 49 percent but they are gaining full control. This is not right.''

Singapore Backlash

About 1,000 protesters demonstrated outside Singapore's embassy in Bangkok March 9, demanding Temasek abandon its Shin acquisition. Several consumer groups under the anti-Thaksin People's Alliance for Democracy have started a boycott against Shin-linked products, as well as companies more than 25 percent- owned by Singapore interests, and those belonging to Thaksin's ``allies.''

Singapore's government said March 9 it is ``not involved'' in the deal. Temasek, which has a portfolio of S$103 billion ($63 billion) of investments, is wholly owned by the city- state's finance ministry.

``The Shin Corp.-Temasek deal is a private sector deal, done purely on a commercial basis,'' the Singapore government said in a letter to embassy protesters. ``It is not a government-to-government deal. The Singapore government does not interfere in the business and operations of Temasek Holdings.''

Temasek Expansion

Temasek's Chief Executive Ho Ching has been investing in banks, pharmaceutical companies, telephone companies and airlines across Asia. She is married to Singapore Prime Minister Lee Hsien Loong, who is also finance minister.

``The Temasek deal with Shin Corp. is a catalyst, not a cause. Grievances against Thaksin and his family existed long before this particular transaction,'' Robert Broadfoot, managing director at Hong Kong-based Political & Economic Risk Consultancy Ltd., said March 9. ``It has nothing to do with anything that Singapore is doing, but when you're a state-owned entity and you're moving into political environments you don't control, there's a possibility of a backlash against you.''

To contact the reporter on this story: Beth Jinks in Bangkok at bjinks1@bloomberg.net

To contact the editor responsible for this story: Bruce Grant in Hong Kong at bruceg@bloomberg.net.

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