Deutsche Telekom cashes in its Celcom chips

9 Jun 2003

German telecoms operator Deutsche Telekom (DT) [NYSE: DT] has offloaded its 6% interest in Malaysia’s second largest mobile operator Celcom [CECM.KL] to Telekom Malaysia [TLMM.KL] for MYR435 million (USD114 million), ending a nine-year association with the company. The move is believed to clear the way for the state-run Malaysian incumbent to take control of Celcom; it already holds a 31% interest in the cellco. DT accepted a general offer of MYR2.75 per share for its 158 million shares, well below the MYR7 figure per share it had been holding out for. Telekom Malaysia made the German heavyweight a general offer in 2002, but at the time DT resisted strongly claiming the offer was too low. It subsequently filed a legal petition with the International Court of Arbitration in Paris. DT originally paid USD600 million for a 20% holding in Celcom in 1996, but relations between the two have cooled. In recent months several agreements made by the two companies have been torn up and four DT directors sitting on the Celcom board have resigned. Telekom Malaysia’s acquisition is set to create the country’s largest mobile player, overtaking Maxis Communications which currently holds the top spot.

Malaysia