Singapore Telecommunications (SingTel) is looking to sell a significant stake in its wholly-owned Australian unit Optus to Canadian private equity giant Brookfield, a source with direct knowledge of the matter said on Wednesday.
Southeast Asia’s largest telco operator is in advanced talks with Brookfield over the stake sale, the source said, declining to be named as the information is not public yet.
Earlier on Wednesday, SingTel dismissed a report by the Australian Financial Review (AFR) that it was in advanced talks to sell Optus in a deal that could value Australia’s second-largest telecommunications group at up to A$18 billion ($11.90 billion).
“There is no impending deal to offload Optus for the said sum, as reported,” SingTel said in a stock exchange filing.
“That said, we regularly conduct strategic reviews of our portfolio to optimise the value of our assets and businesses and will explore all options to maximise shareholder value.”
SingTel said Optus remained an integral and strategic part of the group and it is committed to Australia for the long term, as its business there drew public ire after a 12-hour network blackout in November that affected over 10 million Australians.
The incident has prompted investigation, the departure of Optus’s CEO and a A$1.5 million ($990,900) fine.
The talks to sell a stake in Optus come just a week after SingTel sold shares worth S$950 million ($711 million) in India’s Bharti Airtel to U.S. investment firm GQG Partners as part of its capital recycle plan as both its earnings and share performance stagnate.
SingTel’s shares jumped nearly 4% on Wednesday after the AFR report before the company requested a trading halt.
The company, majority-owned by Singapore’s state investment firm Temasek Holdings, posted a largely unchanged profit for the third quarter, as weak local operations offset growth in its information technology and Australian telecom units.
Brookfield and Optus, which SingTel has owned since 2001, did not immediately respond to Reuters’ email requests for comment.
Reuters