Singtel announced this morning that it has entered into conditional share purchase agreements with Temasek to acquire 21% of Intouch Holdings (Intouch) and 7.4% of Bharti Telecom Limited (BTL) for a total consideration of S$2.47b. The acquisition will be settled fully in cash, funded through: 1) internal cash, 2) shortterm debt, and 3) proceeds from share placement of 386m new Singtel shares to Temasek totaling S$1.61b at S$4.16/share.

Singtel will pay Temasek THB60.83 (~S$2.35) for each share of Intouch, which amounts to S$1.59b, and INR235.62 (~S$4.74) for each share of BTL, which amounts to S$884.0m. These acquisitions as well as share placement are subject to minority shareholder and regulatory approvals. As the share placement and acquisitions are interdependent and have to close at the same time, we opt to keep our HOLD rating and S$4.26 FV unchanged for now. We will update once we have better clarity from management.  

Source: OCBC Research - 18 Aug 2016