Tuas Targets S$1.43bn M1 Deal Backed by A$416m Equity Raise
Tuas Limited, through its subsidiary Simba Telecom, has announced a transformative acquisition of M1 Limited’s non-ICT businesses for S$1.43 billion, accompanied by a substantial equity raising and debt financing plan.
- Acquisition of M1 Limited’s core telecom assets for S$1.43 billion
- Equity raising of minimum A$416 million via placement and share purchase plan
- S$1.1 billion underwritten bank debt to fund the transaction
- Deal expected to be EPS accretive from year one with significant synergies
- Completion subject to regulatory approvals and conditions precedent
A Strategic Leap in Singapore’s Telecom Landscape
Tuas Limited, via its wholly owned subsidiary Simba Telecom, has unveiled plans to acquire 100% of M1 Limited’s telecommunications business, excluding its ICT operations, for an enterprise value of S$1.43 billion. This move marks a significant expansion for Tuas, positioning it as a full-service telco with enhanced scale and a diversified product portfolio in Singapore’s competitive market.
The acquisition is structured to be immediately earnings accretive, with M1’s last twelve months net profit after tax standing at S$74.3 million, excluding synergies and financing impacts. Tuas anticipates material operational and capital expenditure synergies arising from network convergence and increased scale, which should drive efficiency and innovation.
Funding the Ambition, Equity and Debt
To finance this transformative deal, Tuas is launching a non-underwritten equity raising targeting a minimum of A$416 million through a combination of an institutional placement and a share purchase plan for eligible shareholders in Australia and New Zealand. The placement price floor is set at A$5.24 per share, representing a modest discount to recent trading levels, aiming to balance capital raising needs with shareholder value preservation.
Complementing the equity raise, Tuas has secured S$1.1 billion in fully underwritten bank debt financing. This capital structure is expected to result in a pro-forma net debt to EBITDA ratio of approximately 4.0 times, with management confident in rapid deleveraging through synergy realisation and disciplined operations.
Market Impact and Competitive Positioning
M1, established in 1994 and a pioneer in Singapore’s mobile services, brings a substantial customer base of over two million subscribers and a strong track record of innovation, including early adoption of nationwide 4G and 5G networks. The combined entity will hold a more formidable market share across prepaid, postpaid, and broadband segments, enhancing Tuas’s competitive edge against incumbents like Singtel and StarHub.
The acquisition is expected to deliver a denser, higher-capacity network with improved indoor and outdoor coverage, bolstered by complementary spectrum holdings. This network scale, coupled with a broadened product suite, is poised to enhance customer experience and accelerate service innovation.
Risks and Regulatory Hurdles
Completion of the acquisition remains subject to customary conditions precedent, including approval from Singapore’s Infocomm Media Development Authority (IMDA) and the successful carve-out of M1’s ICT businesses. Tuas acknowledges the inherent risks in integration, potential delays, and the challenge of retaining key personnel critical to M1’s operations.
Moreover, the equity raising is non-underwritten, introducing subscription risk that could affect funding certainty. Regulatory compliance, competitive pressures, and operational risks such as cybersecurity and network reliability also feature prominently in Tuas’s risk disclosures.
Looking Ahead
With the acquisition and equity raising underway, Tuas is set to reshape its footprint in Singapore’s telecommunications sector. The coming months will be pivotal as regulatory approvals are sought and integration plans unfold, with investors closely watching for execution on synergy targets and market response.
Bottom Line?
Tuas’s bold acquisition of M1 signals a new chapter in Singapore’s telecom sector, but execution risks and funding uncertainties remain key watchpoints.
Questions in the middle?
- Will Tuas secure timely regulatory approvals from IMDA to complete the acquisition?
- How effectively can Tuas integrate M1’s operations and realise projected synergies?
- What will be the market’s reception to the equity raising and its impact on Tuas’s share price?
