Acquisition of Green Packet unit will jump start TM's wireless broadband biz, says Public Investment

by **Cals** Thu 27 Mar 2014, 12:36

Business & Markets 2014

Written by Jonathan Gan of theedgemalaysia.com

Thursday, 27 March 2014 10:10

KUALA LUMPUR (Mar 27): Telekom Malaysia Bhd's (TM) potential acquisition of Green Packet Bhd's unit will help jump start the buyer's wireless-broadband business, according to Public Investment Bank.

In a note today, Public Investment analyst Lee Wee Sieng said the success of the acquisition of Packet One Networks (P1) would depend on three important factors.

"While we believe the potential acquisition of P1 will help to jump-start TM‟s wireless-broadband business, whether the acquisition will be value-accretive to TM will depend on: (i) pricing and structuring of the acquisition; (ii) integration of P1 network and customer base; and (iii) availability of handset devices and eco-system for P1/TM spectrums as local mobile telephony industry is predominantly on GSM standard," Lee said.

Public Investment's note follows news reports that TM is believed to have successfully acquired a stake in P1.

Currently, Green Packet owns a 55% stake in P1 which is one of the pioneers in Malaysia to launch Worldwide Interoperability for Microwave Access (WiMax) services.

Pending the official announcement on the possible acquisition, Public Investment has maintained its “neutral” call on TM shares with a target price of RM5.70

Trading of TM and Green Packet shares has been suspended today, according to both companies' statements to the exchange.

TM said it "intends to enter into a transaction which requires an announcement to be made."

Prior to the suspension, TM shares were traded at RM6.20.

Green Packet's latest closing price was 52 sen.