Singapore Telecommunications (SGAPY.PK -1.2%) has decided to forego selling its Optus Satellite unit, which it acquired in its $9.69B purchase of Australia's Optus back in 2001.
CEO Chua Sock Koong: "The outcome of the review is that it would create the most value if we continue to keep ... and to invest in the business."
The company wanted more than $1.8B for the unit. Intelsat (I -2%) and a consortium made up of Blackstone, TPG Capital, and Mayalysia's MEASAT Global reportedly submitted bids last week. A source states the consortium was not willing to make an offer above $1.7B.
UOB Kay-Hian analyst Jonathan Koh: "SingTel’s management, they feel that it’s a strong and attractive business ... The margins are very high but the direct synergies are very minimal."
SingTel (SGAPY.PK) has received 2 offers for Optus, its Australian satellite services business, Reuters reports. The Singaporean, state-owned, telecom operator has been shopping the unit since March, and has set a reserve price of $1.8B.
Newly-public Intelsat (I), the world's largest provider of satellite services, reportedly submitted the first bid ahead of this week's deadline.
The second offer is said to have come from a consortium made up of Blackstone, TPG Capital, and Mayalysia's MEASAT Global.
Of the 6 bidders on a short list, France's Eutelsat and SES dropped out in July. It's unknown whether two other names on the list, Apollo Capital and Japan's Sky Perfect JSAT, have submitted bids yet.
A deal isn't guaranteed to happen. Blackstone's offer is reportedly subject to additional due diligence, and SingTel could choose to float an IPO for Optus if the highest offer for the unit is deemed unsatisfactory.
The FCC is investigating allegations Intelsat (I -1.6%) and other satellite service providers are intentionally limiting their network capacity (by failing to upgrade/replace satellites) to prevent rivals from having enough capacity to lease, and inflating prices for the capacity that is available. Harris' (HRS) CapRock Communications unit is among the disgruntled parties.
Recent IPO Intelsat (I +6.1%) moves higher today after announcing earlier that it's commenced a solicitation of consents from holders of its 8.5% Senior Notes due 2019. Also, its subsidiary will issue a notice of redemption for its 11.25% Senior Notes due 2017. It intends to redeem the notes on June 12.
After a lowered price and rough start to trading, Intelsat (I) is turning in a respectable, though unspectacular, IPO day performance. Shares opened at $17 after being priced at $18 (below a prior range of $21-$25), but have since rallied to $18.75, good for a 4.2% gain. That gives the leading satellite service provider, which sold 19.3M shares, a valuation of $1.97B. Intelsat posted 2012 revenue of $2.61B (+1% Y/Y), and a net loss of $149.5M. Free cash flow was -$45M, and total debt stood at $15.9B at year's end. (previous) (F-1)
Facebook wins approval from California to issue stock for its purchase of Instagram. The deal - made up of $300M cash and nearly 23M FB shares - is valued at about $730M now vs. roughly $1B when announced in April. "(I) realize there's upside and downside to all public markets," says Instagram founder Kevin Systrom. "We still firmly believe in the long-term value of Facebook."