KUALA LUMPUR (Jan 20): A consortium led by Khazanah Nasional Bhd is revising the terms for its takeover offer for Malaysia Airports Holdings Bhd (KL:AIRPORT) to lower the acceptance conditions to at least 85%.

The offer price of RM11 per share, however, remains unchanged, according to a statement from AmInvestment Bank issued on behalf of the consortium. The deadline to accept the offer was also extended to Feb 4, 2025 from Jan 24, 2025, it said.

All other terms and conditions of the offer remained the same.

The latest acceptance rate is the level at which Malaysia Airports is expected to be removed from MSCI and other indices, according to a joint statement from members of the consortium. That may force index funds to accept the offer for the shares they control that are yet to be tendered into the offer, it said.

The consortium — which also includes the Employees Provident Fund (EPF), Abu Dhabi Investment Authority (ADIA) and Global Infrastructure Partners (GIP) — said it “shortly expects to declare the offer unconditional and remains confident that total acceptances will exceed 90%”.

The revisions came as the consortium has only secured acceptance of 86.51%, below the rate of 90% required for the offer to become valid, following several extensions.

The original deadline was Jan 8, 2025 under the takeover launched in May 2024. All five independent directors of Malaysia Airports have advised shareholders to reject the deal, arguing that the offer undervalues the airport operator.

Hong Leong Investment Bank, acting as an independent adviser, recommended shareholders accept the offer, citing Malaysia Airports’ long-standing depressed share price, even though the offer was below its valuation range of RM12.61 to RM13.71 per share.

Shareholders who have yet to accept the offer will face reduced liquidity once Malaysia Airports is removed from the indices, and they run the risk of holding unlisted shares once the deal becomes unconditional, the consortium said on Monday.

The consortium also reiterated that Malaysia Airports’ operational and financial underperformance will continue if it remains listed and that the company’s transformation is best undertaken as a private entity, supported by investors able to take a long-term approach.

The transformation requires substantial capital expenditure to both fix the company’s ageing and failing infrastructure, as well as to support expansion, the consortium stressed, flagging that its ability to pay dividends in the future will be greatly reduced by the spending required.

The proposed takeover has also faced criticism from Opposition politicians due to New York-based GIP’s link to asset management giant BlackRock, which has been accused of involvement in the Israel-Palestinian conflict. BlackRock was then in the midst of purchasing GIP and completed the acquisition in October.

If the takeover goes through, the consortium will then delist Malaysia Airports. Khazanah will be the single largest shareholder with a 40% stake in the consortium, while the EPF will hold 30%. GIP and ADIA together will have an effective 30% stake in Malaysia Airports through a joint venture.

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