(Bloomberg) — Advanced Info Service Pcl, Thailand’s biggest mobile phone operator, plans to expand its network by acquiring Triple T Broadband Pcl and an infrastructure fund for a total of 32.4 billion baht ($908 million).
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The Bangkok-based company will buy internet provider Triple T from Jasmine International Pcl for 19.5 billion baht, Chief Financial Officer Tee Seeumpornroj said in an exchange filing. It will also acquire 1.52 billion units, or a 19% stake, in Jasmine Broadband Internet Infrastructure Fund for 12.9 billion baht. At 8.5 baht a unit, that is a 7.6% discount to the fund’s latest unit price of 9.2 baht.
“This acquisition will enhance consumer access to broader and better quality of service by improving broadband inclusion in new areas targeting the upcountry and non-city areas,” Tee said. “This aligns with our business direction to grow the broadband business and effectively develop the nation’s fiber infrastructure.”
Shares of Advanced Info rose as much as 2.8% Monday, the biggest gain since June 24. Jasmine International, a technology company that is expanding into Bitcoin mining, dropped as much as 7.2%, while Jasmine Broadband slid 7.4% before paring the loss to 3.2%.
“Advanced Info is the biggest beneficiary from this deal as the acquisition cost is much lower than we previously expected,” said Wasu Mattanapotchanart, an analyst at Maybank Securities (Thailand) Pcl. “The cheap price and additional subscribers will benefit Advanced Info’s operations and outlook significantly. In contrast, Jasmine has a negative outlook from this deal because it is selling almost all of its businesses at a cheap price.”
Advanced Info, whose major shareholders include Singapore Telecommunications Ltd., said it will finance the acquisitions with borrowings, given its “sufficient debt headroom.” The company pledged to maintain a dividend payout of at least 70% of its net income.
The company entered the broadband business in 2015 to tap rising demand for high-speed internet in Thailand. Its broadband service subscribers rose to 1.87 million as of March 31 from 1.77 million at the end of 2021, the company said in May, while its mobile phone business had 44.6 million customers.
The move comes as Telenor ASA bids to merge its Thai telecommunications unit with True Corp. and potentially topple Advanced Info as the country’s biggest mobile operator. Advanced Info’s backers include Thai billionaire Sarath Ratanavadi, while True is backed by billionaire Dhanin Chearavanont’s Charoen Pokphand Group and China Mobile Ltd.
Advanced Info will request regulatory approvals before entering a formal contract and expects to complete the acquisitions in the first quarter of 2023, it said in a separate statement.
The new acquisitions will complement Advanced Info’s existing businesses and deliver returns to shareholders in the long term, according to Chief Executive Officer Somchai Lertsutiwong.
Jasmine International said it will use the sale proceeds to partly repay debt and liabilities and some as working capital. The company is also in the process of reviewing its business operations and additional investments, it said in an exchange filing.
(Updates with comments from Jasmine in final paragraph. An earlier version of this story corrected reference to Temasek as a shareholder in sixth paragraph.)
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