Malaysian company makes bid for Excelcomindo

Malaysian company makes bid for Excelcomindo

Bloomberg, Kuala Lumpur

Telekom Malaysia Bhd., Malaysia's biggest phone company, has submitted a non-binding bid for PT Excelcomindo Pratama, Indonesia's third-largest cellular phone operator.

"If both parties are willing, there is a chance" the deal may proceed, Chief Executive Md Khir Abdul Rahman told reporters. "It's a non-binding agreement, so you shouldn't read too much into this."

Excelcomindo, which has 1.8 million subscribers in the fourth- most populous country, would give Telekom access to a market of 212 million people where about one in 20 owns a mobile phone, against a third of the 24 million in its home base.

A winning bid may offer Telekom Malaysia its best chance to gain access to Indonesia's fast-growing cellular phone market after missing out when Singapore-government owned companies paid more than US$1.7 billion over the past 18 months to buy stakes in the country's No. 1 and No. 2 mobile phone companies.

Telekom Malaysia, which is being advised by Citigroup Inc., is yet to complete due diligence on PT Excelcomindo Pratama.

Excelcomindo is valued at about $650 million, based on the $325 million PT Indonesian Satellite Corp. paid last year to buy a quarter of its mobile unit from Deutsche Telekom AG.

PT Telekomindo Primabhakti of the Rajawali Group, founded by businessman Peter Sondakh, owns three-fifths of Excelcomindo. Other shareholders include Asian Infrastructure Fund and Mitsui & Co. Ltd.

Telekomindo plans to sell as much as half of the company, people familiar with the transaction said last month. Malaysian billionaire Ananda Krishnan may also bid for Excelcomindo, pitting him against Telekom Malaysia, already his main domestic cellular rival, the people said.

Morgan Stanley is advising Telekomindo.