Tuas shares surge after sealing $385m placement for M1 buyout
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More news: Tuas shares rocketed after the TPG Telecom spinout raised $385 million in an institutional placement to help fund its proposed $1.7 billion buyout of Singapore telco M1.
Shares were up 32% to $7.28 at 12:30pm AEST, taking 12-month gains to 72%.
Citi analysts said they were "positively surprised" by Tuas' decision to pursue M1, noting that there could be "meaningful" synergies not currently captured by the proposal's equity valuation.
They also said the acquisition would enable Tuas to scale up and build upon M1's well-established enterprise platform, and bolster its market share across both mobile and broadband in Singapore.
Tuas raises $385m through institutional placement to help fund acquisition
The news: TPG Telecom spinout Tuas has raised $385 million through an institutional placement that was launched to help fund its proposed $1.7 billion takeover of Singaporean telecommunications company M1 from asset manager Keppel Corporation.
The numbers: Tuas issued roughly 69.9 million new shares at $5.51 each, which is at no discount to the last close price on 8 August.
Tuas is also undertaking a share purchase plan for eligible existing shareholders to buy up to $30,000 in new shares, to raise a total of $50 million.
The new shares will be sold at the lower between the placement price or the 2% discount to the five-day volume weighted average price up to the closing date, which is expected to be 25 September.
Through the institutional placement and the share purchase plan, Tuas is hoping to raise at least a total of $416 million.
The context: On Monday, Tuas announced that its subsidiary Simba Telecom, which operates telco assets in Singapore, had entered a binding share purchase agreement with Keppel Konnect and Konnectivity to acquire 100% of M1 Limited for an equity value of S$1.43 billion ($1.71 million) on a debt-free and cash-free basis.
Tuas is also expecting to finance the deal through S$1.1 billion of fully underwritten acquisition bank debt.
The sources: ASX, Citi research
