By Anshuman Daga and Aradhana Aravindan
SINGAPORE (Reuters) - Malaysia's Axiata Group Bhd
Keppel and Singapore Press Holdings Ltd (SPH)
The two firms are seeking to gain majority control of M1 through the deal.
Axiata views the S$2.06 per share offer as "opportunistic" and "inadequate", said the source, who did not want to be named as Axiata has not issued a response to the offer.
Axiata, which has a 28.3 percent stake in M1, is also in talks to team up with private equity firms and other companies as it considers options to launch its own offer for a bigger stake in M1, the source said.
Keppel Corp, through its unit Keppel Telecommunications & Transportation Ltd (Keppel T&T)
Axiata declined immediate comment on the Reuters story.
In 2017, the three major shareholders conducted a strategic review of their M1 stakes, but sources said it was dropped due to a lower-than-expected offer from external parties.
KGI Securities analyst Joel Ng said the Keppel-SPH offer appears aimed at minority shareholders, but he added it was possible they would raise the offer price to get Axiata's support.
Keppel and SPH are offering a 26 percent premium to M1's last closing share price of S$1.63 on Friday.
"Through majority control, we would, together with SPH, be better able to support M1's management to drive changes and create greater value in the company," Loh Chin Hua, CEO of Keppel Corp, said in a statement.
The offer is subject to conditions, including approval from Singapore's Info-communications Media Development Authority on or before March 27, 2019.
Competition in mobile telecommunications is heating up in Singapore, with Australia's TPG Telecom
Separately, Keppel said it was seeking to privatise Keppel T&T for S$1.91 per share, a 40 percent premium to the stock's last closing price.
It already owns a 79.22 stake in Keppel T&T, which provides logistics and data centre services.
Trading in shares of Keppel, Keppel T&T, SPH and M1 was halted ahead of the announcements.
DBS Bank is the financial adviser to Keppel, while Credit Suisse (Singapore) is advising SPH.
(Editing by Sunil Nair and Darren Schuettler)