* Auction pits strategic buyers against buyout firms
* Deal would rank 3rd in Australia M&A this year
* Other suitors include Blackstone, Carlyle, Inmarsat and
By Stephen Aldred and Jackie Range
HONG KONG/SYDNEY, June 17 France's Eutelsat
Communications SA and U.S. private equity firm KKR & Co are
among the suitors to place first-round bids for Singapore
Telecommunications Ltd's Australian satellite unit, a
person with direct knowledge of the matter said.
SingTel, Southeast Asia's largest telecom operator, values
the satellite business of its Australian unit Optus at more than
A$2 billion ($1.9 billion), and has put it on sale as it battles
tepid growth in its key markets of Singapore and Australia.
Britain's Inmarsat, Blackstone Group and
Carlyle Group are among the other suitors to submit bids
ahead of the Friday deadline, the person told Reuters.
The deal pits strategic bidders against buyout firms in
Australia's third-biggest M&A deal this year, according to
Thomson Reuters data.
SingTel, controlled by Singapore state investor Temasek
Holdings, sent financial information to bidders in May
after announcing a strategic review of the business in March.
Optus sells TV, telephony and broadband services to more than 2
million subscribers in Australia and New Zealand.
In terms of Australia M&A activity this year, the deal ranks
behind the acquisition of Port Botany and Port Kembla by
Industry Funds Management, and the sale of stakes in Australia
power companies to State Grid Corp of China,
according to Thomson Reuters data.
Funds raised from the sale would help SingTel plough cash
into faster-growing businesses.
Other bidders to express interest include, Asia Satellite
Telecommunications Holdings Ltd, Intelsat, Sky
Perfect Jsat Holdings Inc, Australia's NewSat Ltd
and SES, the source said.
Blackstone, Carlyle, KKR, Intelsat, SES and SingTel declined
comment. Eutelsat, Inmarsat, AsiaSat, JSat and NewSat
did not reply to emails seeking comments. The source declined to
be identified as the sale process is confidential.
The suitors are attracted to the steady cashflow generated
by the business as well as the low capital expenditure required,
sources previously told Reuters.
Companies with satellite operating or communications
businesses, like Eutelsat and Inmarsat, are expected to make a
stronger case as buyers, because synergies with their existing
operations mean they can pay more.
However, private equity bids could receive a boost from debt
funding from the United States made available by SingTel
advisers Credit Suisse Group and Morgan Stanley
. The two banks are providing a loan of around A$1.7
billion that buyers can use for the acquisition.
Optus Satellite operates five satellites, with another,
Optus 10, scheduled for launch in 2013. SingTel acquired the
satellite arm when it bought Optus in 2001 for $14 billion.