<News Analysis> Singtel’s potential sale of Amobee a value accretive deal
- According to Sky News, London-Listed adtech firm Tremor is in advanced talks to buy Amobee for GBP165m (~S$280m)
- Amobee has been largely loss making with S$70m loss last year and any sale will have a 3-4% positive impact on Singtel’s earnings
- Maintain BUY on Singtel with unchanged TP of S$3.20
According to Sky News, London-Listed adtech firm Tremor is in advanced talks to buy Amobee for ~S$280m. Singtel does not comment on market rumors so we are unable to authenticate this news.
Amobee has been largely loss making with S$70m loss last year and any sale will have a 3-4% positive impact to Singtel’s earnings as Amobee losses will be absent. In the case of Over-the-top (OTT) arm HOOQ Digital, which liquidated in March 2020, Singtel had to incur liquidation related costs. In the current context, where tech businesses are weakening in value in the global market, we consider this as a good deal for a loss making business. After impairment loss of S$589m undertaken last year, Amobee carrying value on Singtel’s books should be ~S$300-400m. Tremor seeks to buy this for GBP165m (S$280m) which we believe is a reasonable considering the current tech environment.
Singtel has mentioned S$3bn capital divestment target in the medium target including Comcentre proceeds of S$600m-900m. This might include Optus fibre assets in Australia and North American business of Trustwave. Non-core businesses such as 22% stake in Singapore could be worth S$330m based on its current market price.