Optus hired Grant Samuel and Associates to do an independent review of SingTel's cash, shares and bonds offer. It will probably conclude the bid isn't fair because of SingTel's falling share price, the Australian Financial Review said, without citing sources. Still, Optus directors are expected to recommend the bid.
"SingTel has not seen the Grant Samuel report so it would not be appropriate to comment," SingTel spokesman Ivan Tan said in an interview. "However, we stand by our offer and believe it is both reasonable and fair.
"This document will provide shareholders with further details of the offer and we encourage them to review the material before reaching a decision on whether to accept the offer," Tan said.
Stephen Woodhill, general manager of media and public affairs at Optus, said the company won't comment on the report. Optus Director John Cloney couldn't be reached to comment.
The value of the offer has dropped because SingTel's share price has fallen 30 percent, the newspaper said, referring to report. The bid, originally for as much as A$20 billion (US$10 billion), is now valued at A$13.9 billion.
Offer starts next week
The report will be distributed next week to shareholders in a bidders' statement. That statement also will include a restatement of Optus accounts under Singapore accounting standards, the newspaper said. It added the A$13.9 billion value was less than the valuation range in Grant Samuel's report.
SingTel's offer provides Optus shareholders with choice and SingTel still plans to begin its offer next week, said Tan.
Cable & Wireless Plc, which owns 53 percent of Optus, said in March it planned to accept 0.54 SingTel shares, plus A$2 cash and A$0.45 in SingTel bonds for its Optus stake.
SingTel also made two alternative offers for Optus: a straight stock offer of 1.66 SingTel shares for every Optus share and A$2.25 in cash and 0.8 of a SingTel share for each Optus share held.
Optus shares fell A$0.03 to A$3.47. SingTel shares were unchanged at S$1.70.
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