Cable & Wireless Optus Limited (Optus) today welcomed the proposal from Singapore Telecommunications Limited (SingTel) to make an offer for the company of up to A$4.57 per share.
The proposed offer, which values Optus' equity at up to A$17.2 billion, would create a major Asia-Pacific telecommunications company, with proforma revenues of almost A$10 billion for the year to 31 March 2000, a combined market capitalisation of approximately A$49 billion and a strong presence throughout the region.
SingTel's proposal is a result of Optus' Strategic Review, which was announced on 27 September 2000 to examine alternatives to optimise the growth prospects of each of its businesses and maximise shareholder value.
The proposed offer, when complete, is expected to see the exit of the majority shareholder, Cable and Wireless plc, consistent with its global strategy of focusing on data services to business customers, primarily in the US, Europe and Japan. Cable and Wireless plc has entered into an agreement with SingTel to accept the proposed offer in respect of a total of 19.9% of Optus' issued capital.
Chris Anderson, Chief Executive of Optus, said SingTel's proposal was a tremendous opportunity for the company, employees and customers.
"It helps drive increasing competition and quality in this market," Mr Anderson said.
"With this proposed transaction, Optus will grow from being a successful, highly competitive Australian entity to becoming part of a formidable regional player of stature, significance and strength.
"SingTel's powerful position in the region will assist growth in our major lines of business and enhance Optus' status as the growing challenging competitor in Australia.
"SingTel's financial strength and track record complement Optus' growth, increasing market share and enhanced profitability," he said.
Mr Anderson said SingTel also offers exciting opportunities throughout the Asia-Pacific region, particularly in the high growth wireless and data services sectors. Optus' business will form a key part of an extensive Asia-Pacific telecommunications operator.
Shareholders will be able to select one of the following three options as consideration under the proposed offer:
| 1 | 1.66 SingTel shares for every Optus share; or |
| 2 | 0.80 SingTel shares plus A$2.25 in cash for every Optus share; or |
| 3 | 0.54 SingTel shares plus A$2.00 in cash plus A$0.45 in SingTel US Dollar-denominated bonds for every Optus share. Shareholders who accept this alternative may receive additional cash or bonds (as may become available as a consequence of shareholders accepting the other alternatives) in return for receiving less than 0.54 SingTel shares. To the extent additional cash or bonds are available, the additional amount will be made available first in bonds and then cash, at a rate of A$2.74 per SingTel share. |
If successful, SingTel will seek a general listing of its shares on the Australian Stock Exchange. SingTel has made available a total cash and bond amount of A$9.25 billion under the offer, of which the bond amount will not exceed A$2 billion. The cash element of the consideration will be available to shareholders in Australian Dollars or US Dollars, based on a fixed exchange rate of A$1 = US$0.494.
The proposed offer will be conditional, among other matters, on receiving more than 50% acceptance, approval by the Foreign Investment Review Board and certain other regulatory approvals.
Details of the proposed offer (including a worked example of the consideration alternatives) and other relevant matters are set out in the attachments.
The all-share alternative represents value of A$4.57 per Optus share (based on SingTel?s closing share price of S$2.42 on 23 March 2001 and an exchange rate of A$1.00 = S$0.88). This represents a 20.1% premium to the Optus closing price of A$3.80 on 9 March 2001 (the last trading day before SingTel submitted its final expression of interest) and a 17.1% premium to Optus? 30 trading days average share price of A$3.90 prior to 24 March 2001.
The share and cash alternative represents value of A$4.45 per Optus share, a 17.1% and 14.1% premium measured over the same periods.
The share, cash and bond alternative represents value of A$3.94 per Optus share, a 3.6% and 0.9% premium measured over the same periods.
Shareholders will be able to accept the offer by selling their Optus shares to SingTel under the takeover offer or by having their Optus shares bought back by Optus under a buyback.
Optus has entered into an Implementation Agreement to facilitate SingTel's offer being put to shareholders.
The Independent Directors of Optus have commissioned an Independent Expert's Report from Grant Samuel & Associates to provide an opinion as to the fairness and reasonableness of the proposal.
SingTel expects to dispatch its 'Bidder's Statement' to shareholders within eight weeks. Optus' 'Target's Statement', including the Directors' formal recommendation and the report of the Independent Expert, is expected to be sent to shareholders at the same time.
Contacts:
Media enquiries:
Stephen Woodhill
Cable & Wireless Optus
Phone: +61 2 9342 7850
Shareholder enquiries (from Tuesday):
Phone: 1800 677 678