Why M1 remains attractive for bidders

Its return on capital is one of the highest.

Whilst M1 is seen to be the most vulnerable amongst all the telcos upon the entrance of TPG, BMI Research believes it will remain attractive for bidders.

"The company remains attractive due to its small size and capital efficiency. Market leader Singtel uses 43 times more capital than M1, and earns 25 times as large a profit, making M1's return on capital one of the highest across developed markets," BMI said.

More so, in the face of greater price competition and uncertainty over the company's future strategy, M1's owners welcome a sale, which would allow Axiata to avoid the risk of adding more to its existing debt pile, Keppel T&T to divest a non-core business, and SPH to focus on its core media business which is challenged as content consumption migrates online.

"M1 could benefit from a clearer strategy with a single shareholder, rather than three, to compete with TPG's strong strategy for the Singapore market," it added.

BMI Research said the Singapore market offers investors good telecoms infrastructure and high penetration.

"Foreign telecoms operators with strong balance sheets could use M1 as a point of entry for expansion into the Singapore market, while firms from other sectors could use the opportunity to diversify into telecoms," it said.