Singtel shares dropped by 3.15% after news that Optus sale is off

SINGAPORE: On Wednesday, Singtel shares dropped by 3.15% to S$2.46 after news broke that the sale of Optus was off. Trading was then halted pending an announcement.

Channel News Asia reported that negotiations about Singtel selling a 20% share in its Australian business, Optus, have ended.

Singtel warned shareholders and potential investors to be cautious about news related to Optus until there are official announcements.

According to a statement from Singtel:

“The group would like to advise shareholders of Singtel and potential investors to exercise caution in their review of any media reports relating to Optus in the absence of any definitive announcements when dealing with the shares of the company.”

Singtel clarified that “there is no impending deal to divest Optus which remains a strategic and integral part of the Singtel Group.”

According to the Australian Financial Review, talks between Singtel and Brookfield, a potential buyer, have stopped because they couldn’t agree on the price.

The Edge Singapore also reported that on March 13, there were talks that Singtel might sell Optus for A$16 billion (S$14 billion), but Singtel denied this.

In an announcement, they said, “Optus remains an integral and strategic part of Singtel, and we are committed to Australia for the long term.”

Although there was confirmation that “Brookfield will not be making a full acquisition,” there was speculation that Brookfield was interested in buying a 20% stake in Optus for about A$3.2 billion (S$2.82 billion) to A$3.6 billion (S$3.17 billion).

There’s also speculation that Singtel might still consider other options, like selling part of Optus through an initial public offering.

This speculation grew stronger after a cyberattack on Singtel, and Singtel needed capital to introduce new technology. Meanwhile, TPG Telecom, a rival of Singtel, is also looking for buyers.

Half of Singtel’s operations are in Singapore and Optus. The rest is made up of smaller stakes in telecom companies in India (Bharti Airtel), Indonesia (Telkomsel), and the Philippines (Globe Telecom).

At 10:54 am, Singtel posted a request to lift the trading halt. /TISG

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