KUALA LUMPUR (May 15): Malaysia Airports Holdings Bhd (KL:AIRPORT) confirmed that it has received a takeover offer from a consortium led by its major shareholder Khazanah Nasional Bhd and the Employees Provident Fund (EPF), in a deal worth over RM12 billion.
The other parties in the consortium that is planning to take MAHB private are New York-based Global Infrastructure Partners (GIP) and Abu Dhabi Investment Authority (ADIA).
In a filing with Bursa Malaysia on Wednesday, the airport operator said the consortium — dubbed as Gateway Development Alliance Sdn Bhd (GDA) — is offering RM11 per share to acquire all the remaining 1.12 billion MAHB shares not already held by them, representing an about 67.01% stake in the company.
The offer price of RM11 per share is 60 sen or 5.77% higher than MAHB's last traded price of RM10.40 on Tuesday, when its market value stood at RM17.35 billion. The stock has gained over 38% year-to-date, amid speculation about a possible privatisation. The counter, whose trading was suspended on Wednesday morning to make way for the announcement, hit a record high of RM10.46 before that. The stock traded at an average RM7.67 over the past one year, Bloomberg data showed. MAHB will resume trading on Thursday.
Prior to the takeover bid, Khazanah owned a 33.2% stake in MAHB, while EPF holds a 7.9% stake. ADIA, on the other hand, has a 0.13% stake.
Upon completion of the takeover, the consortium will wholly own MAHB. Khazanah will be the single largest shareholder with a 40% stake in the consortium, while EPF and GIP Aurea Pte Ltd (a joint venture between GIP and ADIA) will each hold a 30% stake.
GIP will have an effective 25% stake in MAHB via its 83.3% stake in the joint venture with ADIA. ADIA will have a 5% effective stake.
Earlier on Wednesday, The Edge reported, citing sources, that the four parties are working together to privatise MAHB. The weekly had, as early as April 8, written that a couple of substantial shareholders of MAHB were planning to form a consortium to take the airport operator private.
The takeover of MAHB is aimed at upgrading and modernising the company’s operations, enhancing passenger service, improving airline connectivity and stimulating traffic growth, the joint offerors said on the rationale of their offer.
"All of these will help unlock the potential of Malaysia’s airport network, and drive the continued development of the Istanbul Sabiha Gökçen [International Airport] in Türkiye," they said.
"The joint offerors believe these objectives will be best achieved by MAHB as a private entity, taking a long-term approach to decision-making and capital investment, and benefiting from GIP's airport expertise," they added.
The joint offerors said they had identified several priority initiatives to be undertaken on completion of the exercise, including placing immediate focus on evaluating key capital expenditure projects and resolving delays such as the aerotrain and the baggage handling system at the Kuala Lumpur International Airport (KLIA). They will also look at enhancing passenger experience by alleviating congestion, improve passenger flows and terminal ambience at MAHB’s airports, and expand the retail and food and beverage offerings.
Besides that, the joint offerors are also looking to attract new airlines, upgrade service levels, grow airport capacity, and drive economic stimulus by partnering with state bodies and local businesses to expand activity around MAHB’s airports.
The joint offerors also confirmed that there are no plans for lay-offs as a result of the transaction, and that existing employment rights will be fully safeguarded. Further, the government of Malaysia will retain certain special share rights in MAHB.
Largest acquisition in Malaysia in nearly three years
The deal, which would come to about RM12.32 billion or US$2.6 billion, would be Malaysia’s largest acquisition in nearly three years since DiGi.Com Bhd acquired Celcom Axiata Bhd for US$5.94 billion in 2021, according to Dealogic.
The offer price of RM11 per MAHB share is a 15.2% premium to the prevailing three-month volume-weighted average price of RM9.55 per share, MAHB's filing showed.
The offer price also implies a 49.5% year-to-date increase based on the stock's closing price of RM7.36 per share at end-2023. In contrast, the benchmark index FBM KLCI has risen 10.4% year-to-date.
In a joint statement by the offerors, EPF chief executive officer Ahmad Zulqarnain Onn said the fund's investment in MAHB is expected to bring positive benefits to EPF members and the public, thereby contributing significantly to Malaysia’s sustainable growth agenda.
"The EPF views this offer as an investment opportunity that aligns with our investment objectives and commitment to bolstering domestic investments. As an integral component of the national infrastructure, MAHB plays a vital role as a gateway for trade, tourism, and business activities, contributing significantly to economic development and prosperity," he said.
With its expertise in owning and operating airports, GIP chairman and CEO Bayo Ogunlesi said the firm will focus on improving customer service for MAHB, elevating operational excellence, growing passenger volumes and enhancing employee engagement.
"We are delighted to partner with Khazanah, the EPF and ADIA, with whom we have strong and productive strategic relationships, as part of this offer for MAHB.
"We look forward to working with our partners to build a bright future for Malaysia, MAHB and all stakeholders," he added.
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