TUA -62.79%: Not often we see an ASX 200 stock down over 60% in a session, but that was the case today for the Singaporean focused Telco run by David Teo being absolutely punished on the back of a very concerning announcement.
The Singaporean regulator has suspended its review of Tuas’ proposed acquisition of Keppel’s M1 business, following allegations Tuas’ telco arm Simba may have been using unauthorized radio spectrum.
The regulator said the issue could represent a breach of Singapore’s Telecommunications Act and Simba’s operating licence conditions. The announcement throws significant uncertainty over the proposed M1 acquisition, with the transaction facing a May 21 long-stop date and discussions with counterparties ongoing.
At the time of the deal announcement, M1’s telecom operations were generating roughly S$806m in annual revenue and S$195m in EBITDA, versus Simba/Tuas on a standalone basis generating annualised revenue of under S$200m and EBITDA of ~S$80–85m.
TUA had become one of the market’s favourite stories over recent years, supported by rapid subscriber growth, strong execution and the transformational M1 deal. Today’s collapse is a sharp reminder that when expectations and positioning become heavily one-sided, regulatory risk can trigger an extremely violent unwind. We don’t own TUA.
