Singapore Press Holdings - Conducting strategic review for M1 stake
- SPH announced last Friday that they have, together with Keppel T&T and Axiata who are other major shareholders of M1, jointly appointed Morgan Stanley Asia as a financial advisor to assist with a strategic review of their M1 stakes.
- Note that Malaysian telco group Axiata is the biggest shareholder in M1 with a stake of 28.5%, while Keppel T&T and SPH own 19.2% and 13.4% stakes, respectively.
- The investor group has cautioned that the strategic review may or may not lead to a transaction.
- Overall, for SPH, we see this as a positive development which could result in value realization for its M1 stake but at the same time recognize that any re-rating in M1 shares could have limited impact.
- The value of SPH’s 13.4% stake in M1 is currently worth S$272.6m, which constitutes only 4.8% of SPH’s market cap or S$0.168 per share of SPH. We expect a positive knee-jerk reaction in SPH’s share price this week after the trading halt is lifted but remain primarily concerned about challenging conditions in the group’s media business which forms the main driver of the group’s profitability.
- Maintain SELL with an unchanged fair value estimate of S$3.41.