SINGAPORE (Sept 27): Keppel Corporation and Singapore Press Holdings, through a jointly held offeror Konnectivity, is making a pre-conditional voluntary general offer for M1.

Keppel and SPH say the offer to gain majority control will “help drive business changes in M1 and enable M1 to compete more effectively in the telecommunications industry.”

The offer price for each M1 share is $2.06 each, or 26% higher than its last traded price of $1.63 before trading was halted for the announcement.

With 937.2 million M1 shares outstanding, the offer values the telco at $1.9 billion.

Bursa Malaysia-listed telco Axiata Group Bhd is M1’s biggest shareholder at 28.7%. Keppel Telecommunications & Transportation (Keppel T&T), a listed subsidiary of Keppel, owns about 19.3% of M1, while SPH holds about 13.5%.

Axiata Group is said to be open to considering any offer for its stake in M1 but said that any bid should incorporate “acceptable control premium”, according to Malaysian media reports.

However, Axiata may also decide to make its own offer for M1 if the price announced by SPH and Keppel is too low, according to Bloomberg.

Meanwhile, Keppel and Keppel T&T are also proposing a scheme of arrangement to privatise Keppel T&T.

Keppel and Keppel T&T are offering $1.91 in cash per share, representing a 40% premium over its last traded price of $1.36.

"Keppel T&T’s minority shareholders, who are cautious of the prospects of M1 in the face of heightened competition, can obtain a clean cash exit from Keppel T&T," says Keppel.

The scheme will require approval by Keppel T&T shareholders at an EGM which is expected to be convened in the first quarter of 2019.

Mobile telecoms competition is heating up in Singapore, with Australia's TPG Telecom seeking to launch a new service after winning a license to become the city-state's fourth telecom operator.

M1 is considered to be the most vulnerable to new competition.

Shares in M1 have fallen close to 10% over the past 12 months, and 59% from its record high of $3.99 in February 2015 to $1.63 on Monday.