Report: Australian government favours SingTel bid
- 30 July, 2001 08:00
The Australian government has given high-level assurances to Singapore Telecommunications Ltd. (SingTel) that it supports the company's A$17 billion (US$8.65 billion) takeover bid for local carrier Cable & Wireless Optus Ltd. (CWO), according to the Friday edition of The Australian newspaper.
The assurance -- reportedly given to SingTel this week by a senior cabinet minister -- follows the statement by Australian Defense Minister Peter Reith last month that the takeover bid poses no threat to Australia's national security. CWO will carry around 70 percent of Australia's defense communications on two satellites to be launched next year, potentially placing sensitive military information within the grasp of a company controlled by a foreign government. SingTel is 78 percent owned by the Singapore government.
On Monday, the Defense Department made its final submission on the matter to Australia's Foreign Investment Review Board (FIRB), which has the final say on whether the deal can go ahead.
SingTel has twice had to extend its offer to acquire Optus in a cash and share offer. On Tuesday, it extended the offer period by a further month to Sept. 3, although it said that FIRB may not have made a decision by then. The U.S. also has a say in the matter, as some of the technology used in the CWO satellites needs a U.S. export license, and this license must be re-examined in light of the proposed change of ownership from CWO to SingTel.
Australian media mogul Kerry Stokes has been conducting a high-profile campaign against the SingTel takeover. SingTel continues to say it is confident the bid will receive approval.