Shareholders of Gulf Energy Development Plc approved a proposed merger with its telecom affiliate, Intouch Holdings Plc, on Thursday, clearing the path for a 990-billion-baht transaction.
Following the merger approval, Gulf’s shares on the Stock Exchange of Thailand were set to experience their largest increase in two weeks, pushing the company’s market value to 660 billion baht. Intouch’s shares also anticipated their biggest rise in nearly a month, valuing the parent company of mobile operator Advanced Info Service at 330 billion baht.
Gulf’s founder and CEO, Sarath Ratanavadi, stated at the shareholders’ meeting in Bangkok that the merger would accelerate the growth of both the business and earnings for the newly formed entity. “The almost unanimous approval from Gulf Energy shareholders presents a significantly more optimistic outlook,” he told reporters. “I am prepared to buy out all shares from shareholders who oppose the merger.”
Just minutes before the vote results were announced, Mr. Sarath mentioned that he had not ruled out the possibility of withdrawing the proposed buyout of dissenting shareholders’ shares if they voted overwhelmingly against the merger. Earlier reports indicated that the billionaire was hesitant to proceed with buying out minority investors who might oppose the merger, which could present a substantial obstacle to finalizing the deal.
Since the merger announcement in July, both companies have seen a surge in their share prices, complicating and increasing the cost of completing the merger. Mr. Sarath, who, along with his family, controls approximately 74% of Gulf Energy, must buy out minority shareholders to finalize the agreement. Thai law requires that more than three-quarters of shareholders approve the merger, and the major shareholder must purchase shares from dissenting investors.
Ranked as Thailand’s richest person, Mr. Sarath has a net worth of $15.3 billion, according to the Bloomberg Billionaires Index.
In July, Gulf Energy stated its intention to merge with Intouch to streamline the group’s shareholding structure and maximize future operational and investment benefits. A key condition of the merger involves Mr. Sarath buying out minority shareholders voting against the merger at the prevailing market prices as of Wednesday.
As part of the agreement, Mr. Sarath can withdraw his offer to acquire Gulf shares from dissenting investors if the share price exceeds 45 baht as of October 2. The shares closed at 56.50 baht on Wednesday, representing a 26% premium over this threshold.
For Intouch, he retains the option to cancel the offering if the company’s stock price goes above 76 baht, with shares closing at 91 baht on Wednesday.
