SINGAPORE : Malaysia's dominant phone company Telekom Malaysia is raising its stake in the Singapore mobile operator MobileOne.
Together with Malaysian state investment agency Khazanah, Telekom is buying a 12.06 percent stake in M1 for S$260 million.
The purchase is being done through their joint venture SunShare Investments and will raise their total stake in M1 to 17.7 percent.
The deal requires regulatory approval in Singapore.
SunShare Investments is buying over the 12.06 percent stake in M1 now held by Britain's Cable & Wireless and Hong Kong's PCCW.
It is paying S$2.20 a share.
When completed, the deal will make SunShare the single biggest shareholder of M1 with a 17.7 percent stake.
That's higher than the 14.1 stake held each by Keppel T&T and Singapore Press Holdings.
M1 is Singapore's third largest telco after SingTel and StarHub.
Telekom Malaysia says it has no intention of seeking effective control of M1.
Dato Abdul Wahid Omar, Group CEO, Telekom Malaysia, said: "Under the Securities rules, once you cross 30 percent, you are obliged to make a general offer. For the moment, that's obviously not our intention. Secondly, when it comes to seeking approval from IDA, between 12 and 30 percent, there will be certain pre-requisites, beyond 30 percent, there will be other criteria."
Both Keppel T&T and SPH say they have decided not to sell their stakes for now - after discussions with the Malaysian consortium.
But Telekom Malaysia says negotiations will continue with both companies.
It says M1 fits well into its regional mobile aspirations, and will have an immediate positive impact on earnings with reasonable returns.
SunShare is seeking approval to buy up to 30 percent of M1.
A decision by the Infocomm Development Authority is expected sometime in September. - CNA /ch
1st deal of more deals to come?