💫This week, $Singtel(Z74.SI)$ shares experienced a significant rally on 3 Feb, surging as much as 5.2% to S$4.88, marking the stock's biggest one-day gain since early November and reaching a near three-month high
📊The rally was also on the back of trading volume that was quadrupled its 20-day average
📈SingTel’s outperformance helped lift the Straits Times Index to a new all-time high of 4,944.09 points on Wed (The Business Times)
🤝SingTel’s share price surge was primarily driven by news that a KKR-led consortium with Singtel will fully acquire ST Telemedia Global Data Centres (STT GDC)
📰This news was officially announced by SingTel in an pre-market announcement yesterday
✍Macquarie Research (MQ) analyses the deal and financials of STT-GDC and restated their 12-month target price of SingTel
Read more for the full article containing excerpts of MQ’s research note published yesterday evening, as well as important disclaimers:
What’s new:
SingTel (ST) announced before market open yesterday that it is acquiring a 25% stake in STT-GDC, together with KKR, which will own the other 75%.
Why it matters:
Deal details: S$6.6 billion cash consideration, payable in two equal tranches at transaction close (expected early 2H26) and one year after close. SingTel's cash consideration for the transaction is S$740 million for its 25% share, and excludes its share of the committed capex. Note that the S$740 million represents conversion of ST's 400 million in redeemable non-voting preference share (RPS) plus additional equity capital; the detachable warrants remain unexercised in this transaction
Total enterprise value implied at S$13.8 billion, which is on a consolidated pre-IFRS basis with adjustments for capex, net debt, acquisition debt and minority interests. On a contracted EBITDA basis, the transacted EV/EBITDA multiple is close to data-centre operators' Equinix/Digital Realty average of 20x on a FY26 basis (on Bloomberg estimates). Capex is secured by a S$5 billion financing facility provided to the consortium by a syndicate of banks at a highly competitive interest rate.
Financials: STT-GDC reported a net loss of S$185m in FY24, and the transaction is earnings dilutive at -1%, based on pro-forma financials. Management stated that STT-GDC's FY24 EBITDA would be S$0.35 billion including minorities.
Overview of STT-GDC: It is a data-center operator with 673MW of data centers in operation as at Dec-25. Portfolio of 50 data centers is split into 22% Europe, 46% India, 30% SE Asia and 2% North Asia, and is more entrenched in the cloud space. A pipeline of 1.7GW in new capacity is planned across Europe and SE Asia. Customers are mostly global hyperscalers and blue-chip enterprises.
What now
MQ has an Outperform rating on SingTel with a 12-month target price of $5.29 based on a Sum of Parts stock methodology.
Note:
Macquarie Research is independent from the Warrants business, what the Macquarie Warrants desks quote from Macquarie Research may not reflect the complete analysis of Macquarie Research on the relevant company over time.
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Macquarie has call warrants tracking SingTel shares. Click on the link below to be taken into the Live Matrix of the trending call warrant LOTW, where you can see how it moves alongside SingTel.
*Trending warrant refers to warrants on the tightest spreads and highest liquidity
Trending SingTel call $SingtelMBeCW260730(LOTW.SI)$: https://warrants.com.sg/tools/livematrix/LOTW
The warrant is up 47.4% from SGD 0.019 on its first listing date to yesterday’s 5PM close of SGD 0.028, 6 times more than SingTel’s 7.2% increase to $4.90 over the same period.
Those bullish on SingTel shares from current levels may therefore wish to consider using trending SingTel call warrant LOTW to do so. As for those bearish, there is no SingTel put warrant available.
Investors may wish to note that magnified movements in warrants work both ways, and will give rise to magnified losses if an investor’s view was wrong.
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