By Patpicha Tanakasempipat
BANGKOK (Reuters) -Thailand's Gulf Energy Development Pcl is planning a $5.4 billion buyout of Intouch Holdings which controls Advanced Info Service Pcl (AIS) (BK:ADVANC), the country's top mobile operator.
Bangkok-based Gulf Energy, which owns 18.9% of Intouch, said in a filing it had offered to buy the rest of the shares for 65 baht per share, 11% higher than its close on Friday.
The $5.4 billion bid if successful would be the second largest M&A deal in Thai history, behind only Tesco (OTC:TSCDY)'s $10.6 billion sale of its local operations last March, Dealogic data showed.
If Gulf is able to secure at least 50% of Intouch, it will also offer to buy out AIS at 122.86 baht per share, it said in a filing, well below the stock's Monday close at 169.50.
The company added that Intouch, which owns 40.45% of AIS, had high potential to generate cash flow given the telecom firm's growth potential.
"The company is confident that such investments will generate sustainable and long-term returns in terms of dividends," Gulf said in the filing.
AIS acknowledged the plan in a filing but did not comment on whether the bid was welcome. A representative for Intouch could not immediately be reached for comment.
Gulf said it does not intend to buy out Intouch's satellite operator Thaicom Pcl and will request that Thailand's securities regulator waive its requirement for a tender offer, it said.
Singapore Telecommunications, the biggest shareholder in Intouch with a 21% holding and which also owns 23% of AIS, said it was reviewing its options for the stakes.
"Singtel views its stakes in (Intouch) and (AIS) as strategic investments and we believe in the long term outlook of the businesses," the company said in a statement.
Intouch shares were up 7.69% in late Monday trade following the news, while Gulf Energy, which is led by billionaire Sarath Ratanavadi, was down by around 1.5%. AIS shares were up 0.89%.
AIS competes with True Corp, the country's No. 2 mobile operator, and Total Access Communication (DTAC), owned by Norway's Telenor.
Gulf said it would use working capital and financing from financial institutions to fund the transaction. The company will also retain an independent financial adviser to provide opinions for its shareholders.
Gulf and Intouch did not name their financial advisers in the filings.
($1 = 31.2300 baht)