China Mobile acquires 18% of True
Print Edition
CHINA Mobile Ltd has agreed to buy an 18 percent stake in Thai telecoms group True Corp for US$881 million, in Thailand’s first major corporate deal since the military coup last month.
True Corp, backed by billionaire Dhanin Chearavanont’s Charoen Pokphand Group, said it was raising US$2 billion through a rights share issue to boost its financial position. As part of the fundraising, True Corp will sell 4.4 billion shares to China Mobile, the world’s biggest carrier by subscribers, at 6.45 baht (20 US cents) each, a 13.4 percent discount to True’s last traded price.
The deal is part of the Thai group’s long-term plan to secure a foreign partner and underscores Dhanin’s strong political connections on China’s mainland, sources familiar with the matter said.
In 2013, Dhanin’s CP Group emerged as a surprise buyer for global bank HSBC Plc’s US$9.4 billion stake in Ping An Insurance Group Co of China Ltd. CP Group was the first multinational to invest in China’s agri-business in 1979 and it was tasked with helping modernize China’s farm sector. It also operates Lotus supermarkets in Shanghai, the company’s website showed.
“Through the proposed strategic investment in True Corp, China Mobile is expected to access new customers, international business opportunities and new earnings growth drivers, which is of great significance to the telecom business of the company,” China Mobile’s Chief Executive Li Yue said in a statement.
The proposed deal comes less than three weeks since the military seized power in Thailand. The two companies made no mention of the coup or preceding political crisis, which weighed on corporate dealmaking. New mergers and acquisitions in the country have slumped by 72 percent by value from a year ago to US$648 million by end May, according to Thomson Reuters data.
“The deal is unusual given the country is having a political situation like this,” said Mintra Ratayapas, an analyst at KK Trade Securities.
“Some foreign investors voice concerns about the situation in Thailand. But for True, it seems like the buyer is confident about the company thanks to strong connections with Dhanin.”
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