KUALA LUMPUR (Sept 10): The Hong Kong conglomerate CK Hutchison Holdings Ltd, backed by tycoon Victor Li has made a preliminary approach to Axiata Group Group Bhd about a potential combination of their Indonesian telecommunications operations.
According to a source, CK Hutchison expressed interest in exploring a combination of its Indonesian wireless business with the Malaysian carrier’s local unit, PT XL Axiata but the negotiations haven’t started yet.
XL Axiata’s shares have jumped up about 66% in Jakarta trading this year, giving the company a market value of $2.5 billion. Malaysia’s biggest wireless carrier, Axiata and Norway’s Telenor ASA ended talks last week about merging their Asian telecommunications operations in a deal that would have created a company with 300 million customers across nine countries.
To revitalize growth, Axiata has been introducing strategic investors to some of its businesses and other new areas. In July last year, Japan’s Sumitomo Corp. invested in its mobile advertising arm, while Tokyo-based trading house Mitsui & Co. bought a stake in Axiata’s digital services unit this year. Axiata’s wireless tower business has also attracted preliminary takeover interest in recent months, according to reports.
According to a source, the potential deal in Indonesia hasn’t been determined. There will be deliberations at an early stage but there’s no certainty that it will lead to a transaction. “Axiata has created significant value uplift and attractiveness for its operations and as evidenced in the last one year,” Axiata said in a statement in response to Bloomberg queries. “We have attracted a lot of suitors to partner with us and seeking to acquire our assets including Telenor, Mitsui, Sumitomo, among others.”