Keep a Close Eye on INTUCH on a 11% Upside from GULF’s Tender Offer

Analysts expected further gain on INTUCH after the announcement of a tender offer from GULF at a higher price than the current trading value in the market.

 

This morning GULF made a tender offer for Intouch Holdings Public Company Limited (INTUCH) at Bt65.00 per share and Advanced Info Service Public Company Limited (ADVANC) at Bt122.86 per share after the acquisition of over 50% of INTUCH. However, the company expected to opt-out in purchasing Thaicom Public Company Limited (THCOM) shares.

 

Asia Plus Securities (ASPS) stated that the tender offer has a positive sentiment on INTUCH due to the offering price is 11% higher than the market price. As for ADVANC, ASPS had a neutral view even with a 27% downside to the market price when compared with the offering price, seeing no significant change in major shareholders.

ASPS saw that a lack of Singtel, a major shareholder of INTUCH and ADVANC, could affect the latter in losing allies in the regional telecommunication business. However, ADVANC would acquire GULF, which is a leader in Thailand’s energy sector as a replacement.

 

Lastly, ASPS expected a positive sentiment for THCOM even without a tender offer from INTUCH on changing major shareholders, which would erase concerns over having foreigners as major shareholders.

 

ASPS estimated that GULF would require 168 billion baht to tender only 81.07% of INTUCH’s shares in which the source of fund will be from working capital of the business and credit facilities from financial institutions.

 

CGS-CIMB commented that the news of the tender offer should provide positive sentiment for INTUCH shares over the next 2 months. However, if one of the conditions stated in the GULF board’s resolution is not met, the tender offers of all shares of INTUCH and ADVANC will not happen. CGS-CIMB believed the biggest risk to this deal is GULF’s ability to secure sources of funds for the acquisitions.