Yellow Pages for RM25 million?
UPDATED VERSION. What if the 4th Floor Boys insisted that GLC Telekom Malaysia (TM) sell-off its under-performing subsidiary, Yellow Pages, at RM25 million?
Will that be a tough call for Khazanah, which oversees TM? Will that be a tough call for DAWO, who runs TM?
Is RM25 million a fair price by market value?
Look at the comparative benchmarks in former state-run telco companies:
- Telecom NZ sold its yellow pages directories business for NZ$2.24 billion. NZ population is about 4 million. See NZ Herald report of March 26, 2007.
- Telstra of Australia valued its yellow pages business, Sensis, at A$15 billion. Australia's population is about 20.4 million. See IHT report of April 15, 2005.
- The British Yellow Pages business was reported to be worth about US$5.8 billion based on the market value of Yell Group, the British publisher of Yellow Pages directories. The UK has a population of about 60.8 million. Also see the IHT report mentioned above.
It has become a trend for global phone companies to sell-off their advertising and directories units to focus on carrier services. The spin-offs later became vehicles for IPO. .
For example, Singapore Telecommunications has sold theirs. In 2005, shares of Yellow Pages Singapore has risen 6.9% since its US$112 million initial public offering in December, 2004.
Telefónica Publicidad e Información, which publishes Spain's Yellow Pages, raised US$827 million in a 1999 IPO.
QUESTION: Who should get to buy TM's Yellow Pages if it wasn't by open tender?
I can't ask the Little Birds. Let's ask the Fox.
Comments
Dear Jeff,
I'll be upfront. I'm too lazy to do the calculations. But if anyone is interested, they can check this out.
Usually, when a listed entity "undervalues" a transaction, it is a sign that perhaps they want to get around the disclusore requirements from Bursa.
For example, a transaction that is valued at 10% of NTA (for certainty, please refer to listing guidelines) will require approvals from shareholders. Which is a sensitive thing when the transaction has ...well...things to hide.
So, who should you ask? Try the PM? I heard he is trying to be transperant. Sometimes, so transperant ppl cannot see anything. Haha.
Posted by: AverageJoe![[TypeKey Profile Page]](http://www.jeffooi.my/nav-commenters.gif)
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May 7, 2007 04:22 PM
Wahhh...RM 25 Million ? Sounds like a fire-sale.
Many telecom operators would consider their Yellow Pages pretty valuable databases. They sell it off to focus on core operations, not because its not important.
This is still true even with the growth of the World-Wide Web and other business directories.
I smell another backdoor subsidy deal for cronies.
Posted by: kittykat46![[TypeKey Profile Page]](http://www.jeffooi.my/nav-commenters.gif)
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May 7, 2007 06:12 PM
25 million 'only'?? That is very very cheap. Anyone can just buy it and spin it around by adding in some new elements like b2b portal(alibaba),mobile search(tellme),local reviews(yelp)..and sells it with at least 250m.
Posted by: Steve![[TypeKey Profile Page]](http://www.jeffooi.my/nav-commenters.gif)
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May 7, 2007 06:30 PM
RM25mil. Hmmm. Maybe each one of us (25mil of us, yea yea it includes the scums as well) can chip in Rm1 and then we can truly own it. We dont need the scums to fete us every 5 years with rm200. With Yellowpages we will be rich.
Posted by: groo![[TypeKey Profile Page]](http://www.jeffooi.my/nav-commenters.gif)
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May 8, 2007 01:31 AM
think its central edition alone reap 25m per annum! Am sure someone could even fork RM1B for it and it would have a P/E10!
Posted by: rw![[TypeKey Profile Page]](http://www.jeffooi.my/nav-commenters.gif)
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May 8, 2007 10:59 AM