United Communi-cation (Ucom) stock yesterday rose 18 per cent on an attractive share-swap ratio with Total Access Communication (DTAC).

The stock jumped to Bt50 at the opening bell and headed north further to briefly peak at Bt52, a gain of 25 per cent, before weakening to close the market at Bt49.

It was the seventh most active stock yesterday. The Stock Exchange of Thailand (SET) yesterday closed 0.39 per cent higher at 671.76. Turnover was thin at Bt7.9 billion.

Ayudhya Securities recommended investors buy the Ucom stock with a fair value of Bt49.35 per share.

Ucom's stock has gained based on DTAC's share conversion, the brokerage reported.

Ucom announced early yesterday morning that DTAC would issue 847.69 million shares at Bt2 par value to swap with the entire Ucom shares at a ratio of 1.95 DTAC shares for one Ucom share. After the share swap, which is aimed to pave the way for Ucom's stock delisting from the SET, Ucom shareholders will become DTAC shareholders.

Ucom said in a filing with the SET that delisting would take place after DTAC's stock completely makes a dual listing on the Thai bourse. The share swap is subject to Ucom shareholders' approval.

Kim Eng Securities (Thailand) said in a note that it had upgraded its recommendation from "hold" to "speculative buy" on Ucom stock.

Using DTAC's current share price of US$4.14 (Bt146) par value in the Singapore Exchange and applying a discount of 10 to 20 per cent, Ucom's fair value falls in the range of Bt45.20 to Bt50.90 per share.

According to the broker's calculation, Ucom's fair value would stand at Bt56.50 in case of no discount for DTAC's shares.

Ucom's fair value will be Bt50.90 based on a 10-per cent discount on DTAC's stock, Bt48 on 15 per cent and Bt45.20 on 20 per cent.

"This scheme seems to be fair to Ucom's minority shareholders since they will then hold DTAC shares, which will be listed on the SET," the broker said.

"The price for DTAC's initial public offering (IPO) will be determined later but may be at more than a 10-per-cent discount to the price quoted on the Singapore market."

According to DTAC executives, the company's IPO process will be conducted in the second quarter this year while Ucom's stock is expected to delist from the market in the third quarter.

Under the plan, DTAC would split its par value from Bt10 to Bt2 and the number of its shares will be raised from 458 million to 2.29 billion. Thailand's second-largest mobile-phone service provider would thereafter float 222 million IPO shares - 82 million newly issued shares and the remaining shares held by Ucom - to the public.

DTAC's registered capital will be raised from Bt4.58 billion to Bt4.74 billion following the share allocation.

Oranan Paweewun

The Nation