Qatar Telecom Q.S.C. (“the Qtel Group,” “the Group,” or “Qtel”) (QTEL.QA) confirmed that, upon settlement, it will hold a 65% effective stake in PT Indosat Tbk (“Indosat”), the second largest mobile operator in Indonesia.
The majority stake in Indosat, secured by the successful conclusion of co-ordinated dual Tender Offers in both Indonesia and the United States, will mark a significant advance for Qtel in its long term vision of becoming one of the top 20 telecom companies globally by the year 2020.
Indosat is a driving force in the Indonesia telecommunication market: a market which, with some 237.5 million people and mobile penetration rates of just 58% has considerable growth potential for the Group. Moreover, as the country’s second largest mobile operator, Indosat commands a 28.7% share of Indonesia’s GSM mobile market with over 36.5 million subscribers connected to its nationwide network.
Announcing the conclusion of the co-ordinated dual tender offer process, His Excellency Sheikh Abdullah Bin Mohammed Bin Saud Al-Thani, Chairman of the Qtel Group commented: “This is a landmark development for Qtel and will be looked upon in the years ahead as a defining moment for our Group. Indosat operates in a dynamic and growing marketplace and our achievement today means that, upon settlement, we will have an increased interest in how Indosat capitalises on the opportunities open to us in the years ahead.
“We have always been clear about our vision to become one of the world’s top 20 telecommunications operators by 2020, and a key part of our strategy is to continue to expand our operations in the high-growth markets of Asia, the Middle East and North Africa. This latest development is a significant milestone that puts us squarely on track to achieving this ambitious goal.”
Dr Nasser Marafih, Chief Executive Officer of the Qtel Group added: “This is excellent news and proves the capability and skill of our Qtel team, which has steered this acquisition to a successful conclusion. The Qtel Group is now a driving force in the communication markets of some of the world’s most exciting emerging economies. It is our exposure to these markets, and our ongoing commitment to delivering services that meet the needs of consumers in these markets that will ensure the continued success of our Group.”
Background and detail to the tender offers
The mandatory tender offers were triggered by Qtel’s indirect acquisition of a 40.81% stake in Indosat on June 22, 2008: a move which, under Indonesian law, required that a tender offer be launched. The Indonesian government determined that Qtel’s total ownership could not exceed 65% of Indosat, limiting the number of shares to be considered for additional purchase at 1,314,466,775, or about 24.19% of Indosat’s total issued and outstanding share capital.
A dual and concurrent tender offer process was carried out to acquire Series B Shares of Indosat (“Series B Shares”) through an Indonesian offer, and to acquire American Depositary Shares representing Series B Shares (“ADSs”) through a U.S. offer.
The final result of the concurrent tender offers was announced on February 20.
In the aggregate, Qtel had offered to purchase up to 1,314,466,775 Series B Shares (including Series B Shares underlying ADSs) in the offers, representing approximately 24.19% of the total issued and outstanding Series B Shares (including Series B Shares underlying ADSs) of Indosat. Because the number of Series B Shares (including Series B Shares underlying ADSs) tendered in the offer exceeded the aggregate number of Series B Shares that Qtel offered to purchase, a proration rule was set. The proration factor is approximately 56.54%.
Applying the proration factor, Qtel has purchased 10,010,572 ADSs at the offer price of US$31.0055 per ADS (which is the U.S. dollar equivalent of Indonesian Rupiah 369,400) and 813,938,000 Series B Shares at the offer price of Indonesian Rupiah 7,388 per Series B Share.
Settlement of the offers will occur on or prior to March 5, 2009, after which Qtel will beneficially own approximately 65% of the outstanding Series B Shares (including the Series B Shares underlying ADSs). All tendered ADSs and Series B Shares that were not accepted for purchase in the offers will be returned to the tendering holders.
