It says the acquisition will reinforce its leadership in Singapore&rsquo s broadband market

 

[SINGAPORE] StarHub has purchased the rest of MyRepublic&rsquo s broadband business that it did not already own for a consideration of S$105.2 million, the telco said on Tuesday (Aug 12). 

 

On Monday, its wholly owned subsidiary StarHub Online entered into a sale and purchase agreement to acquire a 49.9 per cent stake in MyRepublic Broadband. As the transaction was completed on Monday, MyRepublic Broadband is now a wholly owned subsidiary of StarHub. 

 

This comes as the years-long speculation of StarHub acquiring M1 was quashed after Keppel on Monday announced the proposed sale of its telco business to Simba Telecom. 

 

An RHB analyst described the deal as a &ldquo pre-emptive move by StarHub to circumvent competitive manoeuvres following Simba&rsquo s acquisition of M1&rdquo . 

 

&ldquo The StarHub-MyRepublic deal gives StarHub full brand ownership and oversight of MyRepublic,&rdquo the analyst added.

 

At 10.46 am, StarHub shares rose to an intraday high of S$1.19, up 2.6 per cent or S$0.03, with some 1.8 million shares changing hands. The counter later closed Tuesday at S$1.18, up by S$0.02 or 1.7 per cent, with 4.6 million shares transacted. 

 

In a statement on Tuesday, StarHub said that the acquisition would reinforce its leadership in Singapore&rsquo s broadband market. 

 

&ldquo The acquisition allows StarHub to assume full ownership of MyRepublic Broadband, enabling greater strategic alignment. It also secures the brand equity in Singapore as well as operational assets integral to MyRepublic Broadband&rsquo s operations,&rdquo the telco said. 

 

Nikhil Eapen, chief executive of StarHub, said: &ldquo We&rsquo ve laid a strong foundation for growth and with MyRepublic Broadband fully under our wing, we can move faster, go further, and serve customers with even greater clarity and care.&rdquo  

 

Eapen, who has been CEO since January 2021, noted that StarHub is moving into its next phase of consolidation as the broadband landscape in Singapore undergoes change. 

 

&ldquo We&rsquo re in a phase of consolidation and we&rsquo re not just watching it unfold, we&rsquo re shaping it. As the market shifts, scale, quality and resilience matter more than ever. Smaller players may find it harder to sustain, especially without robust platforms,&rdquo he said. 

 

The acquisition&rsquo s S$105.2 million consideration comprises a S$94.3 million sale share consideration and a S$10.9 million sale asset consideration. 

 

On a pro forma basis, assuming the transaction was completed on Jan 1, 2024, it would have brought StarHub&rsquo s earnings per share from S$0.089 to S$0.091, and its net profit from S$152.7 million to S$156.3 million, the telco said.  

 

StarHub in March 2022 received regulatory approval from the Infocomm Media Development Authority (IMDA) to acquire a 50.1 per cent stake in MyRepublic&rsquo s broadband unit. 

 

IMDA said then that the proposed move could result in a horizontal consolidation as both companies compete in public Internet access services, Internet protocol telephony services and managed data network services. 

 

Business as usual

Maybank analyst Hussaini Saifee, noting that MyRepublic Broadband is already consolidated within the StarHub business, said: &ldquo I don&rsquo t see any change in competitive dynamic on the back of this announcement.&rdquo

 

He added that StarHub had to complete this deal at some point in time.

 

The RHB analyst, in response to Eapen&rsquo s comments about smaller players finding it hard to sustain, said: &ldquo Scale is essential in a crowded market like Singapore.&rdquo The analyst emphasised that further mergers and acquisitions cannot be ruled out.

 

Hussaini argued that both the StarHub transaction and Simba-M1 merger would not have major bearings on smaller players, noting that the underlying infrastructure for broadband is provided by NetLink Trust.

 

Positive outlook for industry

Analysts believe that StarHub&rsquo s consolidation with MyRepublic, coupled with Simba&rsquo s acquisition of M1, will lead to price rationalism within the telco industry. 

 

Hussaini said that the intense broadband competition, which was triggered by Simba&rsquo s aggressive plans, will ease.

 

He also noted that current pricing plans in Singapore, which include those at S$7 to S$8 offering 200 to 300 gigabytes of data with roaming, is unsustainable. 

 

&ldquo There could be some competitive skirmishes in the lead up to consolidation closure or maybe just after that. But the medium-term trajectory is for competition to stabilise or improve,&rdquo Hussaini added. 

 

Similarly, the RHB analyst believes that telcos will now experience &ldquo sustainable growth and yield, with improving cash flows&rdquo . The analyst added that the market dynamics may see the effects of the consolidation flow through over time.

The stock on Monday hit an intraday low of S$1.14, 6.6% below its prior closing price of S$1.22 on Friday

 

[SINGAPORE] Shares of telco StarHub : CC3 -4.92% fell by more than 6 per cent on Monday (Aug 11) after news of Keppel&rsquo s proposed sale of M1 to Simba Telecom, one of the latest entrants to Singapore&rsquo s telco scene. 

 

This has dashed hopes of a potential StarHub takeover of M1, which was rumoured to be on the cards as far back as 2020. Simba has reportedly been gaining ground against incumbent mobile network operators.

 

As at 4.31 pm, the stock fell to S$1.14, its lowest price since Jun 25, ShareInvestor data showed. With around 8.7 million shares changing hands, it was 6.6 per cent or S$0.08 below its S$1.22 closing price on Friday. 

 

It finished Monday at S$1.16, down by 4.9 per cent or S$0.06, with some 9.1 million shares transacted. 

 

On Monday, Keppel announced the proposed divestment of its telco business M1 to Simba &ndash which put forward the strongest bid among interested parties, at an &ldquo attractive valuation&rdquo , the asset manager said. 

 

With an enterprise value of around S$1.4 billion, the proposed sale would result in Keppel receiving close to S$1 billion in cash for its 83.9 per cent effective stake in M1.  

 

The asset manager will retain M1&rsquo s information and communication technology business and certain assets excluded from the proposed transaction. 

 

Chatter about Keppel selling its consumer mobile business has been long ongoing, with talk of a potential M1 and StarHub merger circulating on and off since 2020. 

 

Manjot Singh Mann, the chief executive of Keppel&rsquo s connectivity segment, highlighted at the company&rsquo s recent earnings briefing on Jul 31 that the telco market is saturated &ndash   with four operators and around seven mobile virtual network operators. 

 

Keppel, at its H1 earnings release, announced plans to monetise some S$14.4 billion of non-core assets to unlock value. 

 

This comes as part of its plans to accelerate the growth of &lsquo New Keppel&rsquo and its transformation into a global asset manager and operator. 

 

Simba first started out in 2020 under the name TPG Singapore, offering a S$10 a month plan that came with 50 gigabytes of data, before its 2022 rebrand. 

 

The telco has grown from serving 487,000 subscribers at the end of H1 FY2022 to 1.1 million subscribers as at H2 FY2024, according to a January report from mobile network analytics company Opensignal. 

MyRepublic&rsquo s broadband business is now StarHub&rsquo s wholly owned subsidiary

 

[SINGAPORE] StarHub : CC3 -4.92% has acquired the remaining 49.9 per cent stake in MyRepublic&rsquo s broadband business that it did not already own, through its wholly owned subsidiary StarHub Online, the telco said on Tuesday (Aug 12).  

 

The acquisition, which makes MyRepublic Broadband a wholly owned StarHub subsidiary, comes one day after the years-long speculation of StarHub acquiring M1 from Keppel was quashed when the asset manager announced its proposed sale of the telco to Simba Telecom. 

 

&ldquo The acquisition allows StarHub to assume full ownership of MyRepublic Broadband, enabling greater strategic alignment,&rdquo StarHub said. 

 

Nikhil Eapen, chief executive of StarHub, said: &ldquo We&rsquo ve laid a strong foundation for growth and with MyRepublic Broadband fully under our wing, we can move faster, go further, and serve customers with even greater clarity and care.&rdquo

 

StarHub in March 2022 received regulatory approval from the Infocomm Media Development Authority (IMDA) to acquire a 50.1 per cent stake in MyRepublic&rsquo s broadband unit. 

 

IMDA said then that the proposed move could result in a horizontal consolidation as both companies compete in public Internet access services, Internet protocol telephony services and managed data network services.