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Gulf Energy Development PCL: INTUCH to aid GULF’s transformation into a digital power operator

  • To make a tender offer for INTUCH; what’s in the deal?
  • Why does GULF want INTUCH?
  • Strong quarterly earnings growth outlook

After GULF yesterday announced plans to make a tender offer for INTUCH, its stock price slipped (market concerns over the reason for the offer and the risk of new capital-raising being necessary). But we see the price dip as a window to BUY GULF cheaply. The deal would strengthen its cashflow and earnings profiles. Moreover, INTUCH will enable GULF to transform from a wholesale electricity generator into a digital retail power player.

To make a tender offer for INTUCH; what’s in the deal?

GULF announced to the SET yesterday that it will seek shareholder approval to make a tender offer for all the shares of INTUCH (at Bt65) and ADVANC (Bt122.86, which is much lower than ADVANC’s current market price, suggesting that it doesn’t want to buy ADVANC outright). Apart from additional earnings and stable cashflows from INTUCH’s telecoms biz, the deal will enable GULF to transform into a digital power operator in Thailand. At first glance, GULF looks set to have sufficient investment capacity to purchase up to 60% of the shares in INTUCH without raising new capital. INTUCH will also contribute cashflows and earnings to GULF, enhancing its future investment capacity. The tender offer looks set to be completed by end-July.


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