Telekom Malaysia Bhd (TM) has denied a newspaper report that it is seeking the Finance Ministry's approval to make a RM1.8 billion bid for Green Packet Bhd's wireless broadband unit, Packet One Sdn Bhd (P1).

In a filing to Bursa Malaysia today, TM said it has not announced any interest to bid for the stake nor seek any approval to do so, as reported in a news article by a business daily today.

"We wish to highlight that the article is misleading as it is based on speculation.

"However, we are always in search of value-creating opportunities as part of our strategy and rest assured, will make any necessary announcements to our stakeholders, where so required," it said.

Kenanga Research, in a note today, said it was surprised by the news as TM had earlier indicated that it was only interested in fixed line and fixed line-related operations.

It said TM's outlook, however, remained solid despite the escalating competition in its home broadband segment.

"It continues to be our top pick in the telcommunication sector due to its strong dividend yield, solid presence in the fibre-to-the-home market and lesser competition seen in its wholesale and fixed-line segments," it said.

MIDF Research said if the acquisition were to go through, TM would face no difficulties in financing it, given its massive cash reserve of RM3.7 billion, as of the second quarter this year.

"The acquisition will also diversify TM's outreach, as it has already discussed with Celcom on a possible mobile virtual network operator structure, providing it a ready mobile network which can be converted to Long-Term Evolution, when the spectrum is available," it said in a note.

MIDF Research maintained its 'buy' call on TM, with an unchanged target price of RM6.75 and Kenanga Research its 'outperform' call with an unchanged RM6.45 target price. -- BERNAMA