Singtel's acquisition of Optus: not fair but reasonable nevertheless

Optus'' independent adviser breaks new linguistic ground.
For those who might think that Singtel is paying too much for Optus (i.e. anyone who lives in Singapore), think again. The independent adviser to the board of Optus has come out with the shock opinion that far from paying too much, the offer is actually “unfair”.

Indeed, independent adviser, Grant Samuel has broken new ground in M&A terms. For while the boutique says the offer is “unfair”, it paradoxically recommends the offer and says “while it is not fair, it is reasonable”. As a result, the directors of Optus have recommended the deal to shareholders.

But what is Grant Samuel thinking? The M&A boutique says the deal is unfair based on valuation techniques, but says it is reasonable because if there wasn’t an offer on the table, Optus’ share price would be trading at lower levels.

It thus makes the following statement on page three of the target statement: “In assessing the fairness of the offer, Grant Samuel indicates that its judgement of fairness is at the margin, and that while the Singtel offer is not fair, it’s only just not fair.”

What to make of all this? A student of literature would call the whole thing "oxymoronic". And says James Pearson, the droll Morgan Stanley banker leading the deal for Singtel: “I think this is a transaction that continues to break new ground.”

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