— MUHAMAD SHAHRIL ROSLI/The Star
KUALA LUMPUR: Hong Leong Investment Bank (HLIB) has advised shareholders of Malaysia Airports Holdings Bhd
(MAHB) to accept the takeover offer of RM11 per share from a consortium led by Khazanah Nasional Bhd and the Employees Provident Fund (EPF).
In an Independent Advice Circular (IAC) filed with Bursa Malaysia, HLIB stated that the offer is "not fair but reasonable" and recommended that shareholders accept the offer as it represents a chance for them to realise their investments.
HLIB said the offer price represents a discount of 12.77% to 19.77% compared to the estimated value of MAHB shares, which is between RM12.61 and RM13.71.
It also noted that the offer price of RM11.00 is a premium of RM6.11, or approximately 124.95%, over the latest unaudited net asset value per share of RM4.89 as of September 30.
HLIB said that based on the on the sum-of-the-parts valuation, the offer price represents a discount of 12.77% to 19.77% compared to the estimated value of MAHB shares, which is between RM12.61 and RM13.71.
It also noted that the offer price of RM11.00 is a premium of RM6.11, or approximately 124.95%, over the latest unaudited net asset value per share of RM4.89 as of September 30.
Non-interested directors, however, disagree with HLIB’s recommendation, deeming the offer unfair and unreasonable.
They recommend that shareholders “reject the offer, as they do not concur” with HLIB’s recommendation for shareholders to accept the offer.
The non-interested directors are Datuk Ir. Mohamad bin Husin, Ramanathan Sathiamutty, Cheryl Khor Hui Peng, Datuk Seri Ir. Koe Peng Kang and Chris Chia Woon Liat.
They opined that the offer Price of RM11 is “not fair”, as it is lower than and represents a material discount of RM1.61 and RM2.71 or approximately 12.77% to 19.77% to the value per MAHB shares ranging between RM12.61 and RM13.71 as estimated by HLIB.
Additionally, all of the non-interested directors are of the opinion that the offer is “not reasonable”.
Mohamad, Khor, Koe and Chia outlined a number of reasons for the recommendation, including the belief that MAHB has already embarked on plans to ensure that it will continue capitalising on the anticipated traffic growth in future, underpinned by the strengthening economy and improved confidence in travelling.
Furthermore, they said post Covid-19, MAHB doubled down on two pivotal drivers to speed up recovery and ensure MAHB airports not only survive but thrive.
Meanwhile, Ramanathan is of the view that the priority initiatives in the offer document stated that there will be an improvement in areas like efficiency in MAHB’s airport operations, an increase in the number of airlines flying into KLIA and improvement in retail revenue, amongst others.
These priority Initiatives look similar to the existing MAHB management strategy with no stated intentions on how the transformation of all airports will happen under this proposal.
Additionally, he said MAHB is an asset-heavy group that operates under a cross-subsidy model where profitable airports fund the development of the smaller airports in Malaysia.
“There is no stated intention on whether this model will be sustained or whether there will be a major change in this area.
“MAHB is not just a public listed company providing value to shareholders, it is also a company that ensures national connectivity across the nation to drive national unity and integration,” he said.
Shareholders have until Jan 8, 2025 to decide on the offer.
A consortium led by Khazanah Nasional and the EPF made a formal takeover offer at RM11 per share, after securing the relevant regulatory approvals last month.
