On Thursday at 2:37 PM (Bangkok time), the share price of True Corporation Public Company Limited (SET: TRUE) slumped by 10.48% or THB 1.30 to THB 11.10, with a trading value of THB 4.98 billion.
On January 22, TRUE notified via the Stock Exchange of Thailand (SET) that Telenor had reached an agreement to transfer 24.95% of its 30.3% holding in TRUE to Arise Digital Technology, controlled by Mr. Suphachai Chearavanont, CEO of Charoen Pokphand (CP) Group.
According to the company statement, both parties have also arranged put and call options concerning Telenor’s remaining 5.35% stake, exercisable within two years following the completion of this initial transaction.
Telenor set the transaction price at 11.7 baht per share, which represents a 5.6% discount from the previous day’s closing price. In its statement, Telenor noted that its future business activities will be focused primarily on the Nordic region.
This draws a mixed sentiment among market analysts. Kasikorn Securities (KS) views the development negatively in the short term, noting that while the transfer of shares had been expected by the market, Telenor’s exit as a major shareholder could reduce the checks and balances previously maintained between Telenor and CP Group.
On the other hand, Kasikorn recognizes that consolidating control under a single group may streamline TRUE’s strategic direction. The brokerage maintains an ‘Outperform’ rating for TRUE with a target price of 14.12 baht.
Meanwhile, Finansia Syrus Securities (FSS) holds a neutral stance toward the transaction. The analyst sees no significant immediate impact on TRUE’s business or operations and notes that further information will be assessed as it emerges.
CGS International Securities (Thailand) (CGSI) also maintains a neutral perspective, viewing the transaction as part of Telenor’s exit strategy from the Thai telecommunications sector following the merger between TRUE and DTAC. The firm expects no material effect on TRUE’s overall direction or strategy and assigns an ‘Add’ recommendation with a target price of 14.70 baht.
Maybank Securities (Thailand) maintains a ‘Buy’ recommendation on TRUE, setting a target price of 15.00 baht per share. The brokerage highlights that following this transaction, the Chearavanont family’s combined holdings in TRUE will rise to 55.3%, given their existing 30.3% stake and the additional shares acquired through Arise.
Maybank identifies the future composition of TRUE’s management team as a key area to watch. They observe that six out of eleven members of TRUE’s current top management have Telenor or DTAC backgrounds, and the company continues to employ foreign specialists from Telenor.
The analyst considers that the departure of management with Telenor experience may be viewed negatively by the market, considering Telenor’s role in improving TRUE’s efficiency and profitability.
