Negotiations over a $3bn-plus sale of a 20 per cent stake in Singtel’s Australian telecommunication company Optus to Brookfield are understood to have come to a halt.
DataRoom understands that talks between the pair have ended for now, with the two groups unable to agree on terms, including the price, and Brookfield has walked away from a possible transaction.
It is believed that Brookfield had been looking to buy an interest in Optus of about 20 per cent and Brookfield balked at the price, sources say.
There have been suggestions that the asking price was between $3.2bn and $3.6bn, with investment bank JPMorgan advising Singtel.
It is understood that talks about a sale have been unfolding for at least a couple of months, and were flagged in an industry publication around the end of last year.
Brookfield has declined to comment on matters.
Still, some believe that an initial public offering or some sort of sell down of Optus by Singtel may not be out of the question in the near term after reports surfaced in 2022 that Morgan Stanley was assessing possible IPO plans for the country’s second-largest mobile network.
This was before it became subject to a cyberattack and was considered as a way to fund its capital spending requirements with the introduction of new technology.
Now the question is whether Brookfield turns its attention to rival TPG Telecom, which is searching for a partial buyer of its business, advised by Bank of America.
Brookfield entered talks with Singtel after a successful investment in Vodafone New Zealand (now called One New Zealand) with Infratil in 2019 for $NZ3.4bn.
Last year, Brookfield sold its half share to Infratil for $NZ1.8bn, giving Infratil full ownership.
Singtel has said that Optus remains an integral and strategic part of the Singel Group and that it was committed to Australia for the long term.
The company said it was focused on improving network resilience and conducting a chief executive search following the departure of Kelly Bayer Rosmarin, but regularly conducted strategic reviews of its portfolio to optimise the value of its assets and shareholder value.
Optus is the second-largest wireless carrier in Australia, with over 10 million subscribers as of 2022, and its mobile network covers 98.5 per cent of the Australian population.
It mostly owns and operates its own network infrastructure, providing services both directly to end users and also acting as a wholesale to other service providers.
Optus also provides broadband and wireless internet services, and other wholesale services include Satellite and 4G Mobile.
Its four major business divisions are Mobile, Business, Wholesale and Consumer and Multimedia.
In 2021, Optus sold a 70 per cent stake in its Australian telecommunication towers for $1.9bn in an effort to secure additional funds to roll out its 5G technology.
Singtel is the largest mobile network operator in Singapore with 4.1 million subscribers through subsidiaries and has a combined mobile subscriber base of 770 million customers.
As well as full ownership of Optus, it owns 32.15 per cent of the second-largest carrier in India, Bharti Airtel.
Singtel is Singapore’s second largest publicly listed business and counts Temasek Holdings as its majority investor, which is the investment arm of the Singaporean government.
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