IFA Says the Tender Offer of INTUCH-ADVANC Will Enable GULF to Grow Significantly
Independent Financial Advisor on asset acquisition transaction in INTUCH, saying that it is reasonable, as an investment enhances potential growth, consistent dividends, and is in line with the company's future business strategy. 
Independent Financial Advisor on asset acquisition transaction in INTUCH, saying that it is reasonable, as an investment enhances potential growth, consistent dividends, and is in line with the company's future business strategy.
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Gulf Energy Development Public Company Limited (GULF) announced the opinion of Independent Financial Advisor on asset acquisition transaction in relation to the investment in all ordinary shares in Intouch Holdings Public Company Limited (INTUCH) through the conditional voluntary tender offer and/or through reading on the Stock Exchange of Thailand or any other means, and the tender offer for all securities of Advanced Info Service Public Company Limited (ADVANC).
IFA views that this transaction is reasonable, especially for the investment in all ordinary shares in INTUCH, as an investment in a company with potential growth, consistent dividends, and is in line with the company’s future business strategy. If the investment in all ordinary shares in INTUCH is successful, the company will not only be a leader in the infrastructure business, but such investment is also strategically appropriate, which lets the company to invest in companies listed on SET with growth potential and good performance. 
However, since the source of funds for this investment will be loans from financial institutions, IFA views that this transaction will be appropriate only when the average interest rate from the financial institution is lower than dividend payout per share of INTUCH.
Moreover, IFA has an opinion that the tender offer for securities of ADVANC is reasonable and necessary because it is a transaction to comply with legal principles and to solve technical problems in the part for the approval of the price of the tender offer for securities of ADVANC received from the company’s shareholders.
The primary company that INTUCH invested in is ADVANC, which operates the telecommunication service that will be the most important infrastructure in the future. Therefore, the Investment in INTUCH is considered an investment that is in line with the company’s growth strategy. Not only will this investment enable the company to have a fully integrated infrastructure business that has the potential for significant growth in the next 5-10  years, but it is also an investment in a business that has continuously growing incomes and has a  consistent dividend payment (ADVANC has an average 3-year increase in total revenue (between 2018-2020) of over 3.00% per year, with an average dividend payout ratio of 70% per year).
The telecommunication business, which is in the process of 5G system development, will play an important role for the development of energy production systems and energy supply (Smart Grid) to be efficient, whereby the power generation business is considered the main business of the company. In addition, such investment  will result in increasing the  competitiveness of the company and diversifying the company from its competitors significantly.
This investment increases the variety of business types and the source of income of the company, which is an alternative to help reduce the risks or impacts that may occur to the company, in the event that any of the current core businesses of the group does not meet the target, no matter the cause. The tender offer for securities of INTUCH will enable the company to immediately increase the source of income from infrastructure projects by 2021.
Besides this, the business of telecommunication and digital services are less affected  by COVID-19 compared to other businesses and investing in a leader in telecommunication  business, which has sustained good performance and ability to generate consistent dividend returns.
If the Investment in INTUCH is successful (holding more than 50% of INTUCH’s shares issued and paid-up), it will allow the company to have control over INTUCH, which will result in the company having an implicit control over ADVANC. When considering the details of the investment, the company may spend at least approximately THB  98.9 billion, but have control over two businesses with a total market value of THB 687.43 billion, which is considered a strategically appropriate transaction.
In addition, the price of the tender offer for securities of ADVANC is lower than the market price and the appropriate price that is evaluated by IFA.
On the other hands, the company may face disadvantages of entering into the transaction such as investment in infrastructure business would normally generate late returns because it is a high capital investment and the return will be delayed due to the long construction  period, whereby investment in telecommunication system is considered as an investment in infrastructure that consume a long duration, and high investment capital, especially in the telecommunication system that the business operation must be permitted.
Due to the fact that the company has never invested in the telecommunication infrastructure business, the company may take some time to study the business and rely on the knowledge and experience of the management team and former personnel of both INTUCH and/or ADVANC. 
Lastly, the company may have less flexibility in operating its business as both the company and its subsidiaries are being listed on the SET.