Starhub

Starhub: In regards to on-going rumours of a potential acquisition by Vodafone Group, Maybank-KE highlights that the websites that initially ran the story are now citing that StarHub has denied the rumours, with the Singapore telco quoted as saying that “StarHub and Vodafone are partners for its Mobile and Enterprise businesses and are not in talks regarding any takeover”. Maybank-KE however guides that such a scenario is possible just on the fact that (1) Vodafone is cash-rich, with reportedly £70b in cash since it sold a 45% stake in Verizon Wireless for US$130b last year. (2) Vodafone is under pressure to perform better, or it may also be acquired, eg AT&T is rumoured to be a potential buyer. (3) Vodafone has been aggressively buying companies recently, including a £7b purchase of Spain’s largest cable operator. So far only two websites have run this story, and as part of a market wrap up rather than as an exclusive column. In fact, both sites ran the same story by the same writer. Maybank-KE finds it strange that the story has not spread further although it was first published on 31 Jul and no other sources have followed up with more details. In conclusion, Maybank-KE would say the sources are doubtful and while it is possible going by what the house knows of Vodafone’s recent actions and financial strength, Maybank-KE is advising investors to treat the latest news as a rumour for now. The house has a Buy call on Starhub with a TP of $4.87.