VGO could cost Ananda more than RM17bil

PETALING JAYA: T. Ananda Krishnan, the biggest shareholder in Maxis Communications Bhd, surprised the market with a proposed plan to take Malaysia’s leading cellular company private.

This comes just over four years after its listing in 2002 and, by just looking at its price prior to suspension of RM13 yesterday, the stock must surely offer a decent premium to its retail initial public offer price of RM4.36.

Market sources are speculating that Ananda, who is expected to launch a voluntary general offer (VGO) for the remaining shares in Maxis, may offer a premium of between 10% and 20% over yesterday’s closing price for the remaining 53.3% stake in Maxis.

Ananda directly and indirectly and/or via Usaha Tegas Sdn Bhd owns 47.05% stake in Maxis.

At RM13 a share, it could cost him/Usaha Tegas a whopping RM17.47bil but, if the offer price were 10% to 20% higher than yesterday’s closing price, the stakes would be higher. This would be the country’s biggest privatisation in recent times. A final takeover proposal is expected to be announced before the week is out.

Maxis group chief executive officer Datuk Jamaludin Ibrahim, when contacted, said: “We will only know (the details) when Usaha Tegas actually submits an offer to us. We expect that to happen on May 3.”

Maxis’ senior team was informed of the proposed takeover on Sunday. Yesterday, Maxis in a statement said: “We received indication that the company was a potential takeover (target) and the notification came from Usaha Tegas, a substantial shareholder in Maxis, whereby Usaha Tegas and its affiliates intend to launch a VGO, via a special-purpose vehicle, for all the shares in Maxis.”

The takeover of the darling among Malaysian telcos puzzled many market players, analysts and fund managers. But this is also a stock that Maxis’ major shareholders feel is not fully valued. Most research houses are tagging Maxis’ fair value at RM12 to RM13 a share despite the “exponential growth expectations.”

“Yes, we are shocked with the takeover plan but it does make a lot of sense to take it private, given that the current major shareholders see huge value in Maxis that the market does not. Maxis’ India unit, Aircel Inc, for one is a brilliant asset and the market is not valuing it,” an analyst said.

“Taking Maxis private also allows the major shareholders to restructure it without having to deal with the minority shareholders. That gives them the flexibility of doing what they need to do with the group and some private equity investors may emerge to nurture the companies within Maxis.

“At some point, we will not be surprised if Maxis makes its way back to the Malaysian bourse but it is expected to also have a dual listing somewhere on an international bourse and its units will also be listed separately,” he added.

Maxis is raring to become a regional communications leader and has stakes in Indonesia’s PT Natrindo Telepon Selular and Aircel. It may also get a slice of Sri Lanka Telecoms.

Maxis’ statement added that the stock would remain suspended through May 3. At the same time, its board would study the implications of the potential takeover but the offer is not expected to affect the day-to-day running of the company.

Taking companies private is becoming a trend although most companies that are taken private usually trade below their book value. The potential takeover aside, there is also talk that Ananda may even take Astro All Asia Networks plc and Tanjong plc private, something analysts have discounted.

Shares in Astro jumped 6.3% to RM5.10 but Tanjong fell 1.2% to RM17 yesterday.

 
MAXIS :  [Stock Watch]  [News] 
MAXIS-CA :  [Stock Watch]

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