SingTel, in a terse three line announcement, has announced that it has given up trying to a find a buyer for the Optus satellite business. Here’s the announcement in full. It’s the shortest press release you will ever see:
“As previously indicated, SingTel initiated a strategic review of the Optus Satellite business in March this year. SingTel has concluded this process. Based on the review, SingTel is committed to growing and investing in the satellite business.”
Translation: “We tried to sell the business, but we wanted too much money and no-one will buy it. So we will hang on to it – maybe someone will buy it later.” SingTel, through government investment vehicle Temasek Holdings, is majority owned by the Singapore Government. It had hoped to use the proceeds of the sale to finance acquisitions and to fund growth in its digital media assets.
The strategic review resulted in SingTel attempting to sell the Optus satellite business, for a reserve price believed to be $2 billion. There were many potential bidders, but they all baulked at the price. So now SingTel will hang on to the five satellites (a sixth will be launched later this year).
Reuters had reported Monday that Intelsat has made an offer, as had a consortium made up of private equity companies Blackstone Group and TPG Capital and Malaysia’s MEASAT. Other potential buyers that dropped out earlier in the bidding process were France’s Eutelsat, Luxembourg’s SES, Japan’s Sky Perfect JSAT, and another private equity consortium led by Apollo Global Management. SingTel was also considering spinning off the division with an IPO, according to some reports.
Optus is the only telecommunication company to own and operate a fleet of satellites in Australia. Its satellites are used to deliver free-to-air and pay TV, mobile telephony and broadband services to over two million Australian households and businesses. The business had revenues of $319 million last year.
Optus Satellite customers include broadcasters and government organisations, such as the ABC, Foxtel, GlobeCast Australia, SBS, Southern Cross, WIN, GWN7, NBN Co, NSW Department of Education and Communities and Air Services Australia. The satellites are also used by the Department of Defence, which is keen to see ownership stay with Optus.
SingTel’s decision to keep the satellites will mean a lot to many in Optus. The company started in the satellite game – it had its origins in the privatisation of the Government-owned Aussat in 1991, when the Government deregulated the telecommunication industry to give Telstra competition.