For 25 years, Optus has been entirely owned by Singapore's Singtel. That could be about to change, with Wellington-based infrastructure investor Morrison securing a seven-week exclusivity period to finalise a bid for more than 30 per cent of Australia's second-largest telco, in a deal that could be worth more than $2 billion.
Morrison's pitch to potential backers, delivered by New York-based chief investment officer William Smales, is built around a "bringing Optus home" narrative aimed squarely at Australia's $4.5 trillion superannuation sector, with at least six funds already in discussions to join the bidder consortium. The firm is also offering those funds "negative controls", giving minority shareholders power to block certain company decisions.
The numbers underpinning the pitch are the real hook. Morrison values its bid at six times Optus's earnings, well below Telstra's 8.7 times and TPG's 7.1 times, and argues there's room to lift postpaid pricing by 20 per cent and close an earnings margin gap to Telstra, which sits at 37.2 per cent against Optus's 27 per cent.
For Singtel, the logic runs the other way. The company first flagged considering a minority stake sale back in May, after Optus contributed to its parent's regulatory and remediation provisions and booked a writedown exiting its Optus Sport assets and talks with Brookfield over a stake last year fell through.
While Optus would be a mega-deal for Morrison, there are a few problems the telco has to manage first. It's still working through the fallout from last September's Triple Zero outage that was linked to two deaths, with the ACMA now suing Optus in the Federal Court over more than 1,000 alleged breaches of its emergency call obligations, on top of a 2022 hack that exposed millions of customers' data.
