Business

Friday July 31, 2009

CIMB, RHB Investment close to clinching Maxis lead adviser job


PETALING JAYA: CIMB Group and RHB Investment Bank are close to clinching the industry’s most soughtafter mandate as lead advisers for the re-listing of Maxis Communications Bhd.

According to sources, the major exercise, scheduled to be announced in August, is currently targeted for Oct 21.

Given its reputation as the country’s major deal maker, the choice of CIMB as lead banker in the offering is least surprising. Furthermore, CIMB was also the lead banker in Maxis’ debut on the local bourse back in 2002 and subsequently, the telco’s privatisation by controlling shareholder T. Ananda Krishnan via Binariang GSM Sdn Bhd in June 2007.

For RHB Investment Bank, snagging this mandat e would be a major feather in its cap.

The deal is widely view ed to be worth as much in prestige as it would be in fees.

The re-listing of Maxis will take place in a year that has barely seen an outpouring of public offerings, not least because of the volatility and uncertainty in equity markets world over.

Many industry players are excited about the return of Maxis to the stock market, which will galvanise the otherwise subdued IPO environment by injecting the much-needed liquidity while offering investors the added appeal of a high dividend-paying stock.

“It (the counter) will be large, should be liquid and will be a yield stock (as opposed to a growth stock).

"For this, AK (Ananda Krishnan) will be remembered for the right things,” a telco analyst said.

Meanwhile, Bernama reported yesterday that CIMB group chief executive Datuk Seri Nazir Razak had referred to the exercise as a “major international public offering ... perhaps the most important equity transaction in the Asia Pacific region if it goes ahead. Therefore, many bankers would chase for the dea l.”

Sources say many foreign IBs have been aggressively pitching for the job but the front runners include ABN Amro, Credit Suisse, Goldman Sachs and UBS.

In terms of valuation, it is estimated that Maxis could fetch a market capitalisation of RM31bil-RM40bil upon relisting premised on an average regional PER of 13 to 15 times on core earnings.

“Significant capital restructuring exercises can be expected within the next nine to 12 months. The company would rather do this exercise at the beginning of that cycle. This is a group that always leaves something on the table for investors, be it in terms of dividend yield or growth,” a source close to the company said.

With that, evidently, the pace of corporate activities in Malaysia, in terms of mergers and acquisition as well as fund raising exercises, has picked up.

“Now, buyers are more or less comfortable with the pricing levels and the room for down side is limited.

“No one wants to miss the boat so activity is definitely picking up in terms of corporate transactions, new businesses and fund raising,” an investment banker said.

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