* China Mobile to take 18 pct stake in True through new
* True is third-biggest Thai telco, well behind AIS and TAC
(Adds analyst view, price moves)
BANGKOK, June 10 Shares in True Corp PCL
fell on Tuesday due to worries over stock dilution
after a rights issue and a private placement to China Mobile Ltd
, which is taking an 18 percent take in the Thai
Shares in other Thai mobile phone operators dropped on
concern about increased competition in the industry now China
Mobile is backing True, although some analysts said that worry
was misplaced and the shares recovered in early trade.
True Corp shares fell 2 percent to 7.3 baht ($0.22),
compared with an offer price of 6.45 baht for the new stock.
Sector leader Advanced Info Service PCL (AIS)
lost as much as 3.8 percent and No. 2 player Total Access
Communication PCL (TAC) plunged 13.7 percent. However,
by 0400 GMT AIS was down 2.9 percent at 233 baht and TAC was
down 3.92 percent at 122 baht.
Citi analyst Arthur Pineda kept a 'buy' recommendation on
AIS stock and 'neutral' on TAC, saying the entry of China Mobile
into True would not in itself translate into the expansion of
telecoms network capacity.
"China Mobile merely acquires a minority stake in an
incumbent operator with proceeds used mainly for debt repayment
rather than building up additional industry network capacity as
characterised by new licenses," Pineda wrote in a report.
"This is thus very different from Taiwan, Indonesia or
India's experience of new player entries, which drove down
pricing," he said.
($1 = 32.4800 Thai Baht)
(Reporting by Viparat Jantraprap and Khettiya Jittapong;
Editing by Alan Raybould)