Qatar Telecom to Pay S$2.4 Billion for Indosat Stake
(Update2)
By Shamim Adam and Wahyudi Soeriaatmadja
June 7 (Bloomberg) -- Qatar Telecom QSC said it will
buy a 40.8 percent stake in PT Indosat for S$2.4
billion ($1.8 billion) as Temasek Holdings Pte divests
its interest in the Indonesian mobile-phone company.
The Persian Gulf emirate's monopoly phone operator
will acquire the stake from Asia Mobile Holdings Pte,
its joint venture unit with Singapore Technologies
Telemedia Pte, the companies said in a statement
today. ST Telemedia, owned by Singapore's state-owned
investment company Temasek, controls 75 percent of
Asia Mobile, while Qatar Telecom owns the rest.
Temasek, which has indirect holdings in Indosat and
larger rival PT Telekomunikasi Selular through its
units, was ordered to sell its stake in either of
Indonesia's two biggest mobile-phone operators within
a year after a district court on May 9 upheld an
antitrust ruling. It filed an appeal to Indonesia's
Supreme Court last month to overturn the judgment.
``ST Telemedia is trying to force the hand of the
Supreme Court to rule in its favor because it's
showing that it's looking to sell its stake,'' said
Kelvin Goh, an analyst with CIMB Investment Bank Bhd.
in Kuala Lumpur.
Temasek owns 54 percent of Singapore
Telecommunications Ltd., which in turn holds 35
percent of Telekomunikasi Selular, or Telkomsel. A
union representing workers from Indonesia's state-run
enterprises filed a complaint against Temasek in
December 2006, claiming the company was fixing call
rates through its stakes in the two operators.
Independent Decision
The union dropped its claim in April 2007, without
giving a reason. Still, Indonesia's competition
regulator, known as KPPU, decided to continue the
price-fixing probe and said on Nov. 19 that Temasek
breached antitrust laws. Temasek has said its
investments are based on commercial considerations and
the boards and managements of ST Telemedia or STT, as
well as Singapore Telecom, make their own decisions on
their operations.
``Any decision in respect of their stake in Indosat is
determined solely by the independent boards and
managements of STT and its associates,'' Myrna Thomas,
Temasek's managing director of corporate affairs, said
in an e-mailed statement today.
Temasek and ST Telemedia have also repeatedly said
they don't direct the operational decisions of
Telkomsel and Indosat. Temasek has said it will take
the case to international arbitration if Indonesia's
courts don't rule in its favor.
No Involvement
``ST Telemedia will no longer have any involvement in
Indosat,'' the statement said.
Still, the sale to Qatar Telecom may face a hurdle as
it is subject to a successful outcome in the appeal to
Indonesia's Supreme Court.
The Indonesia Business Competition Supervisory
Commission, in its Dec. 5 ruling, stated that Temasek
isn't allowed to sell its holdings in Telkomsel and
Indosat to affiliate companies, and each buyer is
restricted to a maximum 5 percent stake.
The Central Jakarta Court on May 9 increased the
allowed stake sale to 10 percent per buyer and also
said that Temasek has the option of cutting its
holdings in both companies by half.
General Offer
If the transaction is successful, Qatar Telecom must
make a general offer for the remaining 59.2 percent of
Indosat shares, according to Indonesian capital market
laws. Its offer must match or be more than the highest
traded price of Indosat's shares in the past three
months.
Indosat traded at 7,150 rupiah on March 28, the most
in the past three months, according to Bloomberg data.
That would value the general offer at 23 trillion
rupiah ($2.47 billion), according to Bloomberg
calculations.
Qatar Telecom's planned purchase of the 40.8 percent
stake of Indosat is equivalent to 7,385 rupiah a
share, Bloomberg calculations show. Indosat was last
traded at 5,650 rupiah per share.
To contact the reporter on this story: Shamim Adam in
Singapore at [EMAIL PROTECTED]; Wahyudi
Soeriaatmadja in Jakarta at Or [EMAIL PROTECTED]
Last Updated: June 7, 2008 09:26 EDT
