Thai Prime Minister Thaksin Shinawatra's family sold a 73 billion baht (US$1.9 billion) stake in Shin Corp, which controls Thailand's biggest mobile-phone operator, to a group led by Temasek Holdings Pte.
Thaksin's family sold 1.49 billion shares at 49.25 baht apiece, equivalent to a 49.6 percent stake, Temasek, Singapore's state-owned investment fund, said in a statement today. The fund will make a tender offer for the remaining shares in Shin Corp and its mobile-phone unit Advanced Info Service Pcl, according to a filing to the Thai Stock Exchange yesterday.
Thaksin is exiting Shin Corp, whose assets span phones, satellites and airlines, after the company's shares rose to match an 11-year high. Temasek, which has made almost half its investments at home, is stepping up overseas purchases after profit growth slowed.
"Thailand is a growing market with one of the highest per capita incomes in Southeast Asia," said Pang Shun-Pen who helps manage US$400 million at HSZ Singapore Pte. "There's lots of room to grow in the telecommunications industry and it's good if Singapore can tap that."
Shin Corp, established and controlled by the Thaksin family, owns Advanced Info, Thailand's biggest cellular phone operator, and Shin Satellite Pcl, Asia's third-biggest operator of commercial orbiters. Other assets include television station ITV Pcl, Internet service provider C.S. Loxinfo Pcl and budget airline Thai AirAsia Co.
The stake was sold "so there won't be criticism of conflicts of interest and other such things," Thaksin told reporters.
Thaksin's family sold their shares to Cedar Holdings Ltd and Aspen Holdings Ltd, Bangkok-based Shin Corp said in a filing. The funds were granted a waiver by Thailand's takeover panel, to avoid mandatory tender offers for the remaining shares in ITV and Shin Satellite, because the companies "do not constitute a substantial portion of the assets of Shin," the exchange statement said. They are "not obliged" to acquire the remainder of CS LoxInfo, the statement said.
Competition has eroded the market share of Advanced Info, Shin Corp's primary asset and Thailand's third-largest company, to 56 percent as of November from 58 percent a year earlier.
Shin Corp's net income in the third quarter of last year dropped 10 percent to 1.98 billion baht.
"Shin Corp is more than a telephone service," Franki Chung, who helps manage more than US$600 million, including Shin Corp shares, at TAL Global Asset Management Ltd in Hong Kong, said before today's announcement. "Thaksin wouldn't want to sell it at a discount."
Thaksin stepped down as chairman of his companies when he became prime minister in 2001, handing executive positions to his family.
The Thai premier accumulated his first fortune in the 1980s with Shinawatra Computer Co, which supplied International Business Machines Corp equipment to the government as it computerized paper records. In 1990, he won one of two mobile-phone licenses. The following year he won an exclusive satellite franchise.
All the money needed to finance the deal has already been converted to baht, which helped strengthen the currency last week, Thai Central Bank Governor Pridiyathorn Devakula told reporters in Bangkok yesterday.