HTAL Shareholders Face Compulsory Acquisition Risk if Takeover Threshold Met

Background and Offer Details

Hutchison Telecommunications (Australia) Limited (HTAL) has issued a Target’s Statement in response to an off-market takeover bid from Hutchison Telecommunications (Amsterdam) B.V. (HTABV), a wholly owned subsidiary of CK Hutchison Holdings Limited (CKHH). HTABV currently holds approximately 87.87% of HTAL shares and is offering to acquire the remaining shares at $0.032 cash per share.

This offer represents a substantial premium to HTAL’s recent trading prices, with a 52.4% uplift over the last closing price before the bid announcement. The Independent Board Committee, comprised of HTAL’s independent directors, has unanimously recommended shareholders accept the offer, provided no superior proposal emerges and the Independent Expert continues to affirm the offer’s fairness.

Independent Expert Assessment

KPMG Financial Advisory Services (Australia) Pty Ltd was appointed as the Independent Expert to assess the offer. Their comprehensive report concludes that the offer is both fair and reasonable, based on a valuation range of $0.009 to $0.022 per HTAL share. The offered price of $0.032 exceeds this range, compensating shareholders for uncertainties and providing immediate cash value.

KPMG’s valuation primarily reflects HTAL’s effective 25.05% interest in TPG Telecom, a major Australian telecommunications operator. The valuation also accounts for HTAL’s share of joint venture debt and other balance sheet items. The expert report highlights that the offer price includes a significant influence premium appropriate for HTAL’s stake.

Strategic Context and Risks

HTAL’s principal asset is its combined direct and indirect 25.05% equity interest in TPG Telecom. Notably, TPG Telecom is in the process of selling its fibre and fixed Enterprise, Government and Wholesale (EGW) assets to Vocus Group Limited for an enterprise value of $5.25 billion. While this transaction is expected to complete in the second half of 2025, there remains uncertainty about how and to what extent the net proceeds will be distributed to shareholders, including HTAL.

Shareholders who do not accept the offer will remain exposed to risks associated with HTAL’s investment in TPG Telecom and its funding obligations to Vodafone Hutchison (Australia) Holdings Limited (VHAH). Additionally, liquidity in HTAL shares is very limited, with less than 1% of shares traded in the past year, potentially restricting shareholders’ ability to sell their holdings at favourable prices.

The offer is conditional on HTABV and its associates acquiring at least 97% of HTAL shares, no prescribed occurrences taking place, and no dividends being declared during the offer period. If these conditions are not met, the offer may lapse. Furthermore, if HTABV acquires at least 96.97% of shares, it may compulsorily acquire remaining shares, compelling minority shareholders to sell on the same terms.

Shareholder Considerations and Next Steps

The Independent Board Committee advises shareholders to carefully consider the offer, including the tax implications and the potential risks of remaining invested in HTAL. Shareholders are encouraged to seek independent financial and legal advice before making a decision.

HTAL has established a shareholder information line to assist with queries, and all announcements related to the offer are available on HTAL’s website. The offer period is scheduled to close at 7, 00pm Sydney time on 7 July 2025, unless extended.

With no superior proposal currently on the horizon and the offer providing a significant premium and immediate cash value, the market awaits shareholder responses and regulatory developments that will determine HTAL’s future ownership structure.