Temasek Holdings

Temasek set to offload 400m SingTel shares

Sovereign fund says it's looking for investment opportunities ahead of more euro-zone turmoil

PUBLISHED : Thursday, 27 September, 2012, 12:00am
UPDATED : Thursday, 27 September, 2012, 2:48am

Temasek Holdings, Singapore's state-owned investment company, is selling S$1.28 billion (HK$8.06 billion) of shares in Southeast Asia's biggest telephone company, according to two people with knowledge of the deal. The stock slumped the most in more than a year.

Temasek is selling 400 million shares in Singapore Telecommunications, representing a 2.5 per cent stake, at S$3.20 each, according to the people.

The price, at the lower end of a S$3.20 to S$3.25 range in a term sheet sent to investors, is at a 3.9 per cent discount from Tuesday's close of S$3.33.

The stock fell 3.9 per cent to close at $3.20 yesterday.

Temasek, which managed S$198 billion of assets as of March, said in June it was seeking investment opportunities as the turmoil in Europe could result in a market slump rivalling the 2008 global financial crisis.

Before the sale, SingTel rose 7.8 per cent this year, lagging behind the 16 per cent gain in the Straits Times Index.

"As an active investor for the long term, we rebalance our portfolio from time to time," Temasek said yesterday.

"We continue to be a significant shareholder in SingTel, which remains the largest company in our portfolio," it said, without providing any numbers.

"It's probably part of their rebalancing and they are probably looking at something else," said Carey Wong, an analyst at OCBC Investment Research.

"SingTel's earnings, while not fantastic, continue to remain stable," he said, adding that "the market has overreacted a bit".

The telephone company last month reported first-quarter profit that missed analysts' estimates as currency moves and lower sales at its Australian unit cut earnings. Net profit in the quarter to June rose 3.2 per cent to S$945 million.

Citigroup and Morgan Stanley are managing the sale, according to the term sheet obtained by Bloomberg.

Temasek spokesman Jeffrey Fang declined to comment on the pricing. SingTel spokeswoman Michele Batchelor declined to comment on the sale.

Temasek owned 8.67 billion shares, or 54.4 per cent of the outstanding shares, of SingTel, Singapore's biggest telephone operator.

Temasek's stake was worth S$27.7 billion, based on its market valuation of S$51 billion at the end of trading yesterday.

SingTel remains Temasek's biggest holding in a listed company by market value, followed by stakes in lenders including China Construction Bank and Standard Chartered.