SingTel Said to Weigh Optus Satellite IPO as Alternative to Sale
Singapore Telecommunications Ltd. (ST) is considering an initial public offering of its Australian satellite unit after drawing lower-than-expected bids for the business, said two people with knowledge of the matter.
Intelsat SA (I) is among suitors that made final-round offers for Optus Satellite, said one of the people, who asked not to be identified as the process is private. A group that included Measat Global Bhd. dropped out of bidding, two other people with knowledge of the situation said.
SingTel is seeking more than A$2 billion ($1.8 billion) for the unit, people familiar with the company have said, which would make it the biggest telecommunications deal in Australia in more than a decade. Suitors including Measat and private-equity firms KKR & Co. (KKR) and Bain Capital LLC exited the process on concerns the price tag isn’t justified by Optus Satellite’s earnings potential, people with knowledge of the matter said.
Measat, controlled by Malaysian billionaire T. Ananda Krishnan, was bidding together with TPG Capital and Blackstone Group LP (BX), the people said. The group had indicated to SingTel that it was willing to pay as much as $1.7 billion for Optus Satellite, one person said.
Michele Batchelor, a spokeswoman for SingTel, declined to comment, as did Dianne VanBeber of Intelsat. Ilham Bakti Adnan, a spokesman for Measat, didn’t return a call seeking comment outside of regular business hours yesterday.
SingTel, as Southeast Asia’s biggest phone company is known, bought the business as part of the $9.69 billion takeover of Optus, Australia’s second-largest phone company, in 2001. In March, SingTel said it was considering options for Optus Satellite. It hasn’t reported separate earnings figures for the unit since the 2001 takeover of Optus.
With five spacecraft in orbit, Optus Satellite provides television, radio, phone, Internet data and military signals to Australia, New Zealand and the Antarctic.
Intelsat, based in Luxembourg, on Aug. 1 reported a second-quarter loss of $408 million on charges for early debt repayments. Sales advanced 2 percent from a year earlier to $654 million, Intelsat said. The company raised $348 million in a U.S. initial public offering in April.
Chief Executive Officer David P. McGlade said on a conference call this month that Intelsat would “certainly look at” acquisitions at the right price. He also said Intelsat would be “disciplined” in doing deals.
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