Qatar Telecom to Pay S$2.4 Billion for Indosat Stake (Update2) By Shamim Adam and Wahyudi Soeriaatmadja
June 7 (Bloomberg) -- Qatar Telecom QSC said it will buy a 40.8 percent stake in PT Indosat for S$2.4 billion ($1.8 billion) as Temasek Holdings Pte divests its interest in the Indonesian mobile-phone company. The Persian Gulf emirate's monopoly phone operator will acquire the stake from Asia Mobile Holdings Pte, its joint venture unit with Singapore Technologies Telemedia Pte, the companies said in a statement today. ST Telemedia, owned by Singapore's state-owned investment company Temasek, controls 75 percent of Asia Mobile, while Qatar Telecom owns the rest. Temasek, which has indirect holdings in Indosat and larger rival PT Telekomunikasi Selular through its units, was ordered to sell its stake in either of Indonesia's two biggest mobile-phone operators within a year after a district court on May 9 upheld an antitrust ruling. It filed an appeal to Indonesia's Supreme Court last month to overturn the judgment. ``ST Telemedia is trying to force the hand of the Supreme Court to rule in its favor because it's showing that it's looking to sell its stake,'' said Kelvin Goh, an analyst with CIMB Investment Bank Bhd. in Kuala Lumpur. Temasek owns 54 percent of Singapore Telecommunications Ltd., which in turn holds 35 percent of Telekomunikasi Selular, or Telkomsel. A union representing workers from Indonesia's state-run enterprises filed a complaint against Temasek in December 2006, claiming the company was fixing call rates through its stakes in the two operators. Independent Decision The union dropped its claim in April 2007, without giving a reason. Still, Indonesia's competition regulator, known as KPPU, decided to continue the price-fixing probe and said on Nov. 19 that Temasek breached antitrust laws. Temasek has said its investments are based on commercial considerations and the boards and managements of ST Telemedia or STT, as well as Singapore Telecom, make their own decisions on their operations. ``Any decision in respect of their stake in Indosat is determined solely by the independent boards and managements of STT and its associates,'' Myrna Thomas, Temasek's managing director of corporate affairs, said in an e-mailed statement today. Temasek and ST Telemedia have also repeatedly said they don't direct the operational decisions of Telkomsel and Indosat. Temasek has said it will take the case to international arbitration if Indonesia's courts don't rule in its favor. No Involvement ``ST Telemedia will no longer have any involvement in Indosat,'' the statement said. Still, the sale to Qatar Telecom may face a hurdle as it is subject to a successful outcome in the appeal to Indonesia's Supreme Court. The Indonesia Business Competition Supervisory Commission, in its Dec. 5 ruling, stated that Temasek isn't allowed to sell its holdings in Telkomsel and Indosat to affiliate companies, and each buyer is restricted to a maximum 5 percent stake. The Central Jakarta Court on May 9 increased the allowed stake sale to 10 percent per buyer and also said that Temasek has the option of cutting its holdings in both companies by half. General Offer If the transaction is successful, Qatar Telecom must make a general offer for the remaining 59.2 percent of Indosat shares, according to Indonesian capital market laws. Its offer must match or be more than the highest traded price of Indosat's shares in the past three months. Indosat traded at 7,150 rupiah on March 28, the most in the past three months, according to Bloomberg data. That would value the general offer at 23 trillion rupiah ($2.47 billion), according to Bloomberg calculations. Qatar Telecom's planned purchase of the 40.8 percent stake of Indosat is equivalent to 7,385 rupiah a share, Bloomberg calculations show. Indosat was last traded at 5,650 rupiah per share. To contact the reporter on this story: Shamim Adam in Singapore at [EMAIL PROTECTED]; Wahyudi Soeriaatmadja in Jakarta at Or [EMAIL PROTECTED] Last Updated: June 7, 2008 09:26 EDT