* Bids are below A$2bln reserve price for Optus satellite
* SingTel to decide at board meeting whether to pursue Optus
* Australia a strong contender for $1.8 billion listing
By Stephen Aldred
HONG KONG, Aug 9 Singapore Telecommunications
Ltd (SingTel) has received two offers for its
Australian satellite business in the final round of the bidding,
including one from U.S.-listed Intelsat SA, three sources
with knowledge of the matter said.
Both offers came in below the A$2 billion ($1.8
billion)reserve price set for the auction and SingTel will
decide at a board meeting next week whether to divest the
business through an initial public offering (IPO) or ask suitors
to improve their bids, the sources said.
Australia is a strong contender for a listing of the
business called Optus Satellite at the same $1.8 billion
valuation if SingTel decides to pursue an IPO, the sources
SingTel, Southeast Asia's largest telecom operator, has been
seeking a sale of the satellite division of Optus since a
strategic review of the asset in March. It wants to use the sale
proceeds in fast-growing emerging markets.
Intelsat, the world's biggest operator of satellite
services, made its offer ahead of this week's bid deadline,
The second offer came from a consortium made up of
Blackstone Group LP, TPG Capital and Malaysia's
MEASAT Global, the sources said.
However, the offer was subject to further due diligence as
the information provided was not deemed sufficient to arrive at
a firm valuation for the Australian company.
TPG and SingTel did not respond to emails seeking comment.
Blackstone, Intelsat and MEASAT declined to comment.
The sources declined to be named as the process was private.
SingTel, controlled by Singapore state investor Temasek
Holdings, acquired the satellite arm when it bought
Optus in 2001 for $14 billion. Optus sells TV, telephony and
broadband services to more than 2 million subscribers in
Australia and New Zealand.
At least two bidders from a shortlist of six dropped out of
the auction process in recent weeks, including France's Eutelsat
Communications, the sources said.
SingTel hired Credit Suisse and Morgan Stanley
to conduct a review of the satellite business and they
are now running the sale.
The Singaporean company could go back to bidders with
further information and ask them to resubmit their bids, the
sources said. However, it could fall back on the alternative
option of an IPO as the offers have not met expectations, they
The consortium had requested information on the length of
contracts related to customers of Optus' satellites among other
details to make a firm offer, according to the sources, but had
not received answers.
Paris-based Eutelsat dropped out of the process after it
agreed to buy Mexico's Satelites Mexicanos SA in July for an
enterprise value of $1.14 billion.. Eutelsat
declined to comment.
Another French firm, SES SA dropped out of the
bidding earlier in July, according to sources with knowledge of
the matter. SES did not respond to requests for comment.
Other shortlisted bidders, U.S. buyout firm Apollo Global
Management and Japanese satellite company Sky Perfect
JSAT Holdings Inc, did not make final offers, the