Despite INTUCH’s recent price rally (close to the Bt65/share tender offer price,) we believe that its valuation should be higher than that tender price, given ADVANC’s long-term value from 5G and THCOM’s incremental value from its partnership with NT and the satellite orbital slot licenses. We reiterate our BUY on INTUCH, premised on its 2H21 core earnings recovery led by ADVANC.
Tender offer for INTUCH and ADVANC shares
On Apr 19, GULF’s BOD approved investment in all INTUCH’s shares through a conditional voluntary tender offer (excluding its current INTUCH holding of 18.93%) at Bt65/share price and/or through shares trading on the SET. In accordance with the Chain Principle, if the tender offer for INTUCH shares results in GULF holding 50% or more of INTUCH’s total voting rights, GULF will be deemed to have majority control in INTUCH (which holds a 40.45% stake in ADVANC and a 41.13% stake in THCOM) and will be obligated to make tender offers for all ADVANC and THCOM shares. The tender offer price of Bt122.86/share for ADVANC is based on INTUCH’s YE20 book value. INTUCH’s Bt65/share tender offer price is assumed to derive from the Net Asset Value by pegging with Friday’s closes—ADVANC (Bt168) and THCOM (Bt9.25)—in the absence of holding discount.