(July 16): Maxis Bhd (KL:MAXIS), a Malaysian telecommunications firm controlled by billionaire T Ananda Krishnan, is considering buying out U Mobile Sdn Bhd to help it expand in the Asian country, according to people with knowledge of the matter.

Kuala Lumpur-listed Maxis has expressed interest in U Mobile and talks are at an early stage, the people said, asking not to be identified discussing private information.

Malaysian businessman Tan Sri Vincent Tan Chee Yioun and Temasek Holdings Pte Ltd-backed Singapore Technologies Telemedia Pte Ltd are among U Mobile’s major shareholders.

Pricing could be a hurdle to a potential buyout, with U Mobile’s owners seeking a valuation of more than RM10 billion, according to the people. There’s no guarantee that a deal will be reached, they said.

In a message to Bloomberg News on Monday, Tan said U Mobile was rejecting the buyout offer and planning to file for an initial public offering (IPO) at the end of July. U Mobile has been considering an IPO since 2021.

“We are rejecting Maxis' offer,” Tan wrote in response to a query from Bloomberg. “We are submitting for an IPO at the end of this month.”

A representative for U Mobile said the company wouldn’t comment on market speculation. “We are very focused on delivering more innovative 5G products and services to our customers, and doing the prep work required to respond to the Applicant Information Package issued by Malaysia’s government to participate in the tender for building the nation’s second 5G network,” she said.

Representatives for Maxis and ST Telemedia declined to comment.

Founded in 2006, U Mobile is Malaysia’s youngest telecom company, according to its website. It has more than 4,000 4G websites and a network ready for 5G, the website shows. It also offers services including fintech and digital payments. Last month, it signed an agreement for an undisclosed equity stake in state-owned Digital Nasional Bhd, which is building 5G infrastructure in the country.

Maxis shares have fallen 9.4% this year, giving it a market value of RM27.3 billion. The company has over 13 million customers and a fibre network of more than 22,000km, according to its annual report.

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