Keppel to let M1-Simba deal lapse on May 21 deadline after IMDA suspends review
Keppel remains open to offers for M1 in the future, says chief executive officer Loh Chin Hua.
An M1 store. (Photo: TODAY/Nuria Ling)
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SINGAPORE: Keppel will allow the sale and purchase agreement with Simba to lapse on its May 21 deadline, said Keppel chief executive officer Loh Chin Hua on Monday (May 18).
This is in view of the Infocomm Media Development Authority's (IMDA) announcement on Monday morning that it has suspended its assessment of telco Simba's proposed acquisition of M1.
"There is a long stop date and it is on Thursday this week. There is no discussion to extend the long stop date, which means that at the passing of the long stop date, the existing agreement will lapse," Mr Loh said at a media briefing, adding that Keppel has been working on alternative plans.
A long stop date is a deadline for the completion of a corporate deal. In March, Keppel extended that date to May 21.
IMDA said on Monday morning that it has suspended its review of the proposed deal after uncovering a potential regulatory breach by Simba.
Responding to a question on whether Keppel will be pursuing any legal costs against Australia's Tuas, which owns Simba, Mr Loh told reporters that "the thought has not crossed our minds".
"If there are some rights which we have, we will look at it. But right now at this moment, we are not looking at that," he added.
He said that there is no fee payment to either party when the transaction ends.
INTERESTED PARTIES
IMDA said it would suspend its evaluation of the deal until further notice, citing an ongoing investigation into whether Simba had been using radio frequency bands that were not assigned to it to provide mobile services.
"This would constitute unauthorised use of frequency spectrum, which is a breach of the Telecommunications Act 1999 and the conditions of Simba’s Facilities-Based Operations Licence," said the IMDA, adding that it is investigating the matter and will take the appropriate enforcement actions if needed.
"As the investigation findings may be material to IMDA’s assessment of the proposed consolidation, IMDA has decided to suspend its review of the proposed consolidation until the investigation has been concluded.”
Mr Loh told reporters that while Keppel will be open to offers for M1 in the future, the current focus will be on "rightsizing" it and reducing cost while maintaining a good customer experience.
"We are open for monetisation at some point, but currently our focus will be on ourselves, on strengthening M1. We believe there are quite a few things we can do," he said.
He declined to say whether rightsizing would involve job cuts.
Mr Loh said that there were previously a number of parties interested in acquiring M1, with "serious discussion" involving at least two. Simba had offered the best terms, he added.
He said the company continues to believe that the telecommunications industry in Singapore is "in dire need of and will benefit from consolidation".
Keppel announced its intention in August 2025 to sell its subsidiary M1 to Simba for S$1.43 billion (US$1.11 billion). M1 and Simba then filed the application in September, with IMDA issuing a consultation paper the following month.
IMDA was assessing the deal under the Telecom and Media Competition Code, which requires authorities to determine whether such a consolidation could substantially lessen competition or raise broader public interest concerns.
This includes scrutiny of how critical telecommunications infrastructure would be operated, particularly in light of heightened cybersecurity risks
Keppel's share price fell by about 2 per cent in early morning trade on Monday, before widening losses to more than 4 per cent. Shares of Australia's Tuas, which owns Simba, fell 60 per cent to A$2.46 (S$2.25) as at 12.45am GMT (8.45am, Singapore time).
In response to IMDA's announcement, Keppel said in a statement on Monday that it understands the authority's considerations and respects its decision.
"While awaiting the outcome of IMDA’s assessment, we have also been working on a Plan B, in case Keppel retains majority ownership of M1, which we will now start executing," it said in a media release.
"In response to the significant challenges facing the telecommunication industry in Singapore, our focus will be on enhancing M1’s efficiency to improve its run rate EBITDA, through rightsizing the company and reducing costs, without adversely affecting customer experience."
In a statement to the Australian Securities Exchange, Tuas said the board will be reviewing the circumstances concerning the alleged unauthorised use of spectrum.
