Axiata, DiGi.com Trade Sharply Down After Telenor Tie-Up Fails
September 09 2019 - 11:21PM
Dow Jones News
By Yantoultra Ngui
KUALA LUMPUR, Malaysia--Shares of Axiata Group Bhd. (6888.KU)
and DiGi.com Bhd. (6947.KU) fell sharply Tuesday morning in the
first day of trading following news that Axiata and Norway's
Telenor ASA (TEL.OS) plan to merge some of their assets had
failed.
Shares of Axiata--Malaysia's largest telecom by market
capitalization--dropped as much as 18% to MYR4.01 in early trading,
hitting their lowest in over four months as shares of Telenor's
Malaysian unit, DiGi.com, shed 12% to MYR4.30, putting both among
the top losers on the local bourse.
In May, the companies said they were discussing a possible
noncash merger of their Asian telecom and infrastructure assets
that would have created one of Asia's largest telecom companies
with potential annual revenue of $12 billion.
Hong Leong Investment Bank Research described the aborted tie-up
as "a negative surprise" that would pressure both Axiata and
Digi.com shares, while AmBank Research downgraded the Malaysian
telecommunications sector to neutral from overweight, citing the
missed opportunity to alleviate the pricing competition that has
eroded the sector's margins in recent years.
Write to Yantoultra Ngui at yantoultra.ngui@wsj.com
(END) Dow Jones Newswires
September 09, 2019 23:06 ET (03:06 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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