KUALA LUMPUR: Buyers are circling Axiata Group Bhd.’s wireless tower business, even as the Southeast Asia telecom giant presses ahead with plans for a broader merger with Telenor ASA’s Asian operations, people with knowledge of the matter said.
Axiata has received preliminary expressions of interest in recent months about a potential takeover of its Edotco Group Sdn. unit, according to the people, who asked not to be identified as the discussions are private. The business could be valued at as much as $3 billion in a deal, one of the people said.
The informal approaches haven’t led to any detailed discussions, and Axiata continues to conduct due diligence on the proposed deal with Norway’s Telenor, the people said. Still, the interest shows that Axiata has other options if it can’t overcome hurdles to the Telenor deal, which include government concerns about job cuts and foreign control of key telecommunications assets.
"Since its initial private placement, Edotco has continued to receive interest from potential investors,” a company spokesperson said in an email to Bloomberg News. "To the best of our knowledge, there are no plans at present for any private sale or equity injection.” Shares of Axiata fell as much as 4.4% in early Monday trading in Kuala Lumpur, the biggest intraday decline in two weeks.
Axiata said in May it is holding talks with Telenor to combine their Asian telecommunication operations to create a company with 300 million customers in nine countries. Potential synergies from the deal would amount to about $5 billion, according to Telenor, which is set to own 56.5% of the new company.
Malaysia Prime Minister Mahathir Mohamad asked for more details on the transaction due to concerns over jobs, Bloomberg News has reported. The deal would be the country’s biggest since he took office in May 2018.
A representative for Axiata declined to comment on interest in Edotco. A Telenor spokesman referred Bloomberg to the announcement in May when asked on an update on talks with Axiata, and if a sale of Edotco assets to a third party would be compatible with such a merger, adding that it doesn’t comment on rumors or speculation.
Read: Axiata’s Merger Plan With Telenor Asia Operations Is Progressing Kuala Lumpur-based Edotco, founded in 2012, owns more than 29,300 towers across Malaysia, Sri Lanka, Bangladesh, Cambodia, Pakistan and Myanmar, according to its website.
Axiata owns about 63% of Edotco, the website shows. Other shareholders include sovereign wealth fund Khazanah Nasional Bhd., Innovation Network Corp. of Japan and pension fund Kumpulan Wang Persaraan (Diperbadankan), according to a 2017 statement on Edotco’s website. - Bloomberg
We're sorry, this article is unavailable at the moment. If you wish to read this article, kindly contact our Customer Service team at 1-300-88-7827. Thank you for your patience - we're bringing you a new and improved experience soon!
What do you think of this article?