Maxis Private

Proposal to take Maxis private

By B.K. Sidhu, The Star

T. Ananda Krishnan, the biggest shareholder in Maxis Communications Bhd, surprised the market with a proposed plan to take Malaysia’s leading cellular company private. This comes just over four years after its listing in 2002 and, by just looking at its price prior to suspension of RM13 yesterday, the stock must surely offer a decent premium to its retail initial public offer price of RM4.36.

Market sources are speculating that Ananda, who is expected to launch a voluntary general offer (VGO) for the remaining shares in Maxis, may offer a premium of between 10% and 20% over yesterday’s closing price for the remaining 53.3% stake in Maxis.

Ananda directly and indirectly and/or via Usaha Tegas Sdn Bhd owns 47.05% stake in Maxis. At RM13 a share, it could cost him/Usaha Tegas a whopping RM17.47bil but, if the offer price were 10% to 20% higher than yesterday’s closing price, the stakes would be higher. This would be the country’s biggest privatisation in recent times. A final takeover proposal is expected to be announced before the week is out.

“Yes, we are shocked with the takeover plan but it does make a lot of sense to take it private, given that the current major shareholders see huge value in Maxis that the market does not. Maxis’ India unit, Aircel Inc, for one is a brilliant asset and the market is not valuing it,” an analyst said.

“Taking Maxis private also allows the major shareholders to restructure it without having to deal with the minority shareholders. That gives them the flexibility of doing what they need to do with the group and some private equity investors may emerge to nurture the companies within Maxis.

“At some point, we will not be surprised if Maxis makes its way back to the Malaysian bourse but it is expected to also have a dual listing somewhere on an international bourse and its units will also be listed separately,” he added.

Maxis is raring to become a regional communications leader and has stakes in Indonesia’s PT Natrindo Telepon Selular and Aircel. It may also get a slice of Sri Lanka Telecoms.

Maxis’ statement added that the stock would remain suspended through May 3. At the same time, its board would study the implications of the potential takeover but the offer is not expected to affect the day-to-day running of the company.

Taking companies private is becoming a trend although most companies that are taken private usually trade below their book value. The potential takeover aside, there is also talk that Ananda may even take Astro All Asia Networks plc and Tanjong plc private, something analysts have discounted.

Shares in Astro jumped 6.3% to RM5.10 but Tanjong fell 1.2% to RM17 yesterday.