There are reports that Optus may potentially be for sale with a price tag of $16 billion.
Optus is currently owned by Singtel, a major telco in Singapore. The potential buyer is Brookfield.
Brookfield is the business that tried to buy Origin Energy Ltd (ASX: ORG), but this was rejected by shareholders, including AustralianSuper which played a large part in knocking back the bid.
Potential deal
The Australian Financial Review reported that Singtel was in advanced discussions about selling Optus.
However, the company then said in an Singapore Exchange announcement that there is “no impending deal” for the said sum. Singtel said Optus remains an “integral and strategic part” of the Singtel Group and it’s “committed to Australia for the long term”.
It said its current focus is on improving network resilience and conducting a CEO search. But, the Singaporean business did then say:
That said, we regularly conduct strategic reviews of our portfolio to optimise the value of our assets and businesses and will explore all options to maximise shareholder value.
Singtel shares rose 4% in response to the potential deal.
How likely is the deal?
Brookfield is a very large institutional investor, which supposedly has a track record of turning around poorly-performing companies.
It recently sold out of Vodafone New Zealand, which was called One New Zealand, and didn’t use the capital/funding it was planning to use for the Origin deal. It seems to have the required amounts.
Brookfield doesn’t seem like the type of bidder to pursue a target unless it’s serious.
It will be an interesting turn of events if Optus does have a new owner. Perhaps a deal would result in Brookfield making major investments in its network to try compete with Telstra Group Ltd (ASX: TLS) more strongly? Would it also compete with Telstra on subscription prices?
Optus customers may benefit from the company changing hands, though it’s not a done deal yet.
