GULF founder to buy stakes of shareholders opposed to merger with INTOUCH
The merger of Gulf Energy Development (GULF) and Intouch Holdings Pcl (INTUCH) has been finalised with the found of GULF deciding to purchase shares from dissenting shareholders at the market closing price on October 2.
Broker UOB Kay Hian Securities (Thailand) expects the merger to significantly boost market capitalisation by 870 billion baht. However, investors are cautioned against rushing to buy shares, as the price has already been factored in the positive news.
According to a recent report submitted to the Stock Exchange of Thailand (SET) by Gulf Energy Development, Sarath Ratanavadi, founder and major shareholder of the company, has expressed his intention to acquire shares from shareholders who oppose the merger.
The purchase will be made at 56.50 baht, which was the closing price of GULF's shares traded on the SET on October 2. The founder will purchase from the objecting shareholders during the period October 17-30.
INTUCH has also notified the SET that Sarath intends to purchase shares from dissenting shareholders at 91 baht, which was the closing price of INTUCH's shares traded on the SET on October 2.
Previously, GULF had informed the SET that an extraordinary general meeting of shareholders had approved the merger of GULF and INTUCH with 99.9931% of the votes in favour.
Kitphon Praipaisankij, deputy managing director and director of analysis and strategy at UOB Kay Hian Securities (Thailand), believes that the merger of GULF and INTUCH and the creation of a new company would result in a substantial market capitalisation, equivalent to one-fourth of the Thai stock market.
As of Wednesday (October 9), the share price of GULF had risen to 59 baht, and the share price of INTUCH had soared to 99 baht. However, he advised investors to be cautious, as the stock prices of both companies were currently trading well above the purchase price and had already reflected the positive news. He suggested that investors avoid chasing additional shares.
The estimated market capitalisation after the merger of GULF and INTUCH is expected to be around 870-875 billion baht. This would make it a significant player in the Thai stock market, but it would still be challenging to surpass DELTA, the current market leader with a market capitalisation of 1.34 trillion baht.
Kitphon warned that the shares were currently overpriced based on fundamentals and recommended that investors avoid buying more shares. He also cautioned that the dividend yields from GULF and INTUCH may not be as attractive as expected, and there was still a long way to go before the share exchange period, which is scheduled for the second quarter of 2025.
