Singaporean telecommunications company Singtel has denied it plans to divest its Optus subsidiary in Australia – despite reports in the Australian Financial Review that discussions with a Canadian buyer are in “advanced stages”.
Singtel halted trading of its shares in Singapore last night (AEST time) after the news broke in the AFR, pending the release of an announcement.
About an hour later the company issued a statement saying there was “no impending deal to offload Optus for the said sum” and that it was committed to Australia “for the long term”.
“We regularly conduct strategic reviews of our portfolio to optimise the value of our assets and businesses and will explore all options to maximise shareholder value.”
Australia’s second-largest telco, Optus has been embroiled in controversies during the past year after a major network outage and a hack that exposed data including personal customer information. The company’s CEO Kelly Bayer Rosmarin resigned in November and last month the company was ordered to compensate 3744 current and former employees whom it had underpaid $7.8 million.
The AFR reported that negotiations are underway with Canadian private equity company Brookfield, which specialises in infrastructure, and that Canada’s CPP Investment Board may join as a consortium partner.
Singtel bought Optus in 2001. Despite the recent scandals – and the resulting impact on the company’s bottom line – a deal in the range of $16 to $18 billion would represent “a big payday” in the words of AFR’s Street Talk.
“Optus remains an integral and strategic part of Singtel Group,” Singtel said, adding that it was exploring all options to maximise shareholder value and the current focus has been on improving network resilience and recruiting a new CEO.
Given the nature of Optus’s business – it would be considered critical infrastructure – any deal would likely subject to approval by the Foreign Investment Review Board (even though the current owner is not Australian-domiciled).
- Additional reporting from Reuters.
