Tuas Faces Regulatory Hurdles as It Pursues Transformative M1 Acquisition
Tuas Limited is poised to reshape Singapore’s telecom landscape by acquiring M1 Limited for S$1.43 billion, backed by a substantial equity raise and bank debt financing. The deal promises enhanced network capabilities and operational synergies, pending regulatory approval.
- Tuas to acquire M1 Limited (ex-ICT) for S$1.43 billion
- Equity raising targets minimum A$416 million to fund acquisition
- Deal expected to be EPS accretive from first year
- Material synergies anticipated from network and operations convergence
- Completion subject to Singapore IMDA approval
A Strategic Leap in Singapore’s Telecom Sector
Tuas Limited, through its wholly owned subsidiary Simba Telecom, has announced a landmark acquisition of M1 Limited’s core telecommunications business for S$1.43 billion. This move signals a bold step to consolidate and strengthen Tuas’s position in Singapore’s competitive telecom market by combining Simba’s rapidly expanding digital consumer base with M1’s established network and enterprise services.
The acquisition excludes M1’s ICT businesses but encompasses its mobile, fixed services, and equipment sales operations, which generated revenues of S$806.1 million and an EBITDA of S$195.4 million over the last twelve months. At an implied multiple of 7.3 times EBITDA, the deal reflects a significant valuation that underscores M1’s strategic value.
Funding the Future, Equity and Debt
To finance the acquisition, Tuas is orchestrating a minimum A$416 million equity raising through a non-underwritten institutional placement and a Share Purchase Plan aimed at existing shareholders. The placement price is set at a 4.9% discount to the recent closing price, balancing investor appeal with capital needs. Complementing this, a fully underwritten bank debt facility of S$1.1 billion will underpin the transaction’s funding structure.
Post-acquisition, Tuas anticipates a pro-forma debt to EBITDA leverage ratio of approximately 4.0 times, with expectations of rapid deleveraging driven by operational efficiencies and synergy realisation.
Unlocking Synergies and Innovation
The strategic rationale centers on creating a more competitive and innovative telecom entity capable of delivering superior service quality and network resilience. By converging mobile and fixed network operations, Tuas aims to unlock material cost savings and operational efficiencies. This integration is expected to accelerate the rollout of advanced technologies such as 5G mobile and ultra-fast 10Gbps broadband, benefiting consumers, small and medium enterprises, and larger corporate clients alike.
David Teoh, Tuas’s Executive Chairman, highlighted the acquisition as a pivotal chapter in the company’s growth journey, emphasizing the enhanced value proposition for shareholders and customers through improved network capabilities and service offerings.
Regulatory and Market Outlook
Completion of the acquisition remains contingent on approval from Singapore’s Infocomm Media Development Authority, a critical regulatory hurdle that investors will watch closely. Meanwhile, Tuas is on track to meet its full-year 2025 financial guidance, with results due in late September, providing a near-term performance benchmark amid this transformative deal.
Overall, this acquisition positions Tuas as a formidable player in Singapore’s telecom sector, with the potential to reshape competitive dynamics and deliver long-term shareholder value.
Bottom Line?
Tuas’s bold acquisition of M1 sets the stage for a new era in Singapore telecom, but regulatory approval and synergy execution will be key to unlocking promised gains.
Questions in the middle?
- How quickly can Tuas realise the projected operational synergies post-acquisition?
- What are the risks if Singapore’s IMDA delays or denies approval for the deal?
- How will the increased leverage impact Tuas’s financial flexibility and credit profile?
