U Mobile’s major shareholders set to reject any takeover bid from another telecom operator

PETALING JAYA: The much-speculated merger between U Mobile Sdn Bhd and Maxis Bhd may not actually happen, according to some media reports that have emerged recently.

NST Major shareholders of U Mobile Sdn Bhd have reportedly rejected any takeover bid for the telco, citing people familiar with the matter.

The report said this is because major shareholders, including Berjaya Group founder Tan Sri Vincent Tan Chee Yioun, are keen to continue expanding U Mobile to become one of Malaysia’s leading 5G players, the sources revealed.

They also said U Mobile was on track to file for an initial public offering (IPO) in the current quarter, the report added.

The alleged merger gained attention following a report by SunBiz on July 18, quoting Communications Minister Fahmi Fadzil as saying that the Malaysian Communications and Multimedia Commission will ensure that any merger between telecommunications service providers maintains healthy competition and prevents monopolies in the industry.

The minister made the statement in response to a journalist’s question following a report earlier this week about a possible merger between Maxis and U Mobile.

Furthermore, Fahmi said that Maxis’ proposal to acquire U Mobile is primarily a commercial decision taken by the companies involved and the government does not interfere in such commercial decisions and remains neutral on whether the merger would be beneficial or detrimental to the market.

Founded in 2006, U Mobile has been eyeing an IPO since 2019, with a target of raising about US$500 million (RM2.1 billion) in the IPO. Another major shareholder in U Mobile is Singapore Technologies Telemedia Pte Ltd, backed by Temasek Holdings Pte Ltd.

Last Monday, it was reported that Maxis, the country’s second-largest mobile operator and controlled by billionaire T. Ananda Krishnan, was considering buying U Mobile to expand its presence in Malaysia.

According to the report, which cited sources familiar with the matter, Maxis has expressed interest in U Mobile and negotiations are at an early stage. The report said the price could be a barrier to a potential takeover, with U Mobile’s owners seeking a valuation above RM10 billion, and there is no guarantee that a deal will be reached.

Meanwhile, a source had said The Business Times that U Mobile shareholders are not selling and that they aim to launch an IPO and plan to grow the business.

U Mobile has around 8.5 million subscribers and over 9,000 4G sites, with a 5G-ready network.