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MAHB privatisation: RM11 per share fair, says Affin Hwang

Publish date: Thu, 16 May 2024, 11:55 AM

KUALA LUMPUR: The Malaysia Airports Holdings Bhd (MAHB) takeover offer by a four-member consortium led by its major shareholder Khazanah Nasional Bhd at RM11 per share is fair, according to Affin Hwang Investment Bank Bhd. 

The firm said the offer price was comparable to its sum-of-the-parts valuation-derived price target of RM10.80.

"We recommend investors to accept the offer, should and when the joint-offerors launch a firm take-over offer after all the pre-conditions are satisfied or waived by the joint-offerors," Affin Hwang said in a note. 

The firm, however, downgraded its recommendation on MAHB to "Hold" from "Buy" previously in view of the limited share price update and regulatory or approval risks associated with the pre-conditional takeover offer. 

MAHB received a takeover offer from the consortium  four-member consortium in a deal worth about RM12.3 billion.

The RM11 per share reflect an MAHB equity value of RM18 billion.

Khazanah, along with the Employees Provident Fund (EPF), New York-based Global Infrastructure Partners (GIP) and Abu Dhabi Investment Authority (ADIA) are jointly to buy all of the remaining 1.12 billion shares in MAHB not already owned by them.

The offer will not be made unless and until the pre-conditions have been satisfied or waived by the joint offerors on or before Nov 15, 2024 (long-stop date) or such other date as the joint offerors may determine in consultation with the Securities Commission.

Affin Hwang noted that the pre-conditions are the receipt of a non-infringement decisions from Malaysian Aviation Commission and the Turkish Competition Authority, any other approvals or consents from the relevant authorities in Turkiye, and merger control approval from the General Authority for Competition Saudi Arabia and the Egyptian Competition Authority.

"Meanwhile, the offer will be conditional upon the joint-offerors having acquired/received not less than 90 per cent of the total issued MAHB shares.

"The joint-offerors will not be taking any steps to address any shortfall in the public shareholding spread in the event that it does not meet the public spread requirement after the closing date," it added.

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