Shareholders of Maxis may be offered big premium
KUALA LUMPUR: Shareholders of Maxis Communications Bhd, which has received notification for a voluntary general offer (VGO) from major shareholder Usaha Tegas Sdn Bhd, will likely get the details of the offer today.
Sources said the premium offered for the remaining shares not owned by Usaha Tegas, which is controlled by T. Ananda Krishnan, could be pretty substantial. To make it attractive for minorities, it could range from 15% to 20%.
Reports have said that the move to privatise Maxis comes at a time when capital expenditure for the company's foray into India is expected to be substantial. By taking Maxis private, analysts say, Ananda will have greater flexibility and possibly quicker lead time to manage his capex requirements.
It is believed that ABN Amro and CIMB Investment Bank have been mandated to arrange the financing to take Maxis private.
Ananda directly and indirectly and/or via Usaha Tegas owns 47.05% of Maxis. The company launched its initial public offering at RM4.36 a share in 2002. Trading in the shares was suspended at RM13 on Monday.
Even at RM13 a share, the proposed exercise would cost RM17.47bil.
The Singapore Straits Times reported on Tuesday, quoting financial executives, that Maxis was pursuing the privatisation because of the potential adverse impact a huge expansion plan could have on its stock.
Maxis, which is facing a price war and a maturing market at home, plans to spend US$3bil as capex over the next three years for its expansion in India and Indonesia.
"That massive expansion plan will lead to interest charges on loans and, generally, result in downward pressure on its stock price over the next three years," the report said.
At the same time, the controlling shareholders of Maxis do not want to reduce their control of the company, the report said.
Quoting a senior KL source close to the deal, the report said: "Staying public would mean that the controlling shareholders will get diluted through the issue of new shares to raise funds.
"But for the owners, the question is: At what point does controlling a reduced interest in a bigger company make sense?"
The report said the move by Ananda to take Maxis private underscored the privatisation bug that had bitten the Malaysian market, which many analysts said was undervalued.
Sources said the premium offered for the remaining shares not owned by Usaha Tegas, which is controlled by T. Ananda Krishnan, could be pretty substantial. To make it attractive for minorities, it could range from 15% to 20%.
Reports have said that the move to privatise Maxis comes at a time when capital expenditure for the company's foray into India is expected to be substantial. By taking Maxis private, analysts say, Ananda will have greater flexibility and possibly quicker lead time to manage his capex requirements.
It is believed that ABN Amro and CIMB Investment Bank have been mandated to arrange the financing to take Maxis private.
Ananda directly and indirectly and/or via Usaha Tegas owns 47.05% of Maxis. The company launched its initial public offering at RM4.36 a share in 2002. Trading in the shares was suspended at RM13 on Monday.
Even at RM13 a share, the proposed exercise would cost RM17.47bil.
The Singapore Straits Times reported on Tuesday, quoting financial executives, that Maxis was pursuing the privatisation because of the potential adverse impact a huge expansion plan could have on its stock.
Maxis, which is facing a price war and a maturing market at home, plans to spend US$3bil as capex over the next three years for its expansion in India and Indonesia.
"That massive expansion plan will lead to interest charges on loans and, generally, result in downward pressure on its stock price over the next three years," the report said.
At the same time, the controlling shareholders of Maxis do not want to reduce their control of the company, the report said.
Quoting a senior KL source close to the deal, the report said: "Staying public would mean that the controlling shareholders will get diluted through the issue of new shares to raise funds.
"But for the owners, the question is: At what point does controlling a reduced interest in a bigger company make sense?"
The report said the move by Ananda to take Maxis private underscored the privatisation bug that had bitten the Malaysian market, which many analysts said was undervalued.
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