Consortium Stands Firm on RM11 per Share Offer for MAHB
Gateway Development Alliance Refuses to Budge Amid Independent Directors’ Recommendations
Kuala Lumpur: Gateway Development Alliance Sdn Bhd (GDA), the consortium proposing to privatise Malaysia Airports Holdings Bhd (MAHB), has reaffirmed its commitment to its RM11 per share offer price, despite independent directors’ recommendations for shareholders to reject the offer.
Consortium’s Stance Unwavering
GDA, which comprises EPF, UEM Group Bhd (backed by Khazanah Nasional Bhd), Abu Dhabi Investment Authority, and Global Infrastructure Partners (owned by BlackRock), believes its offer price represents a premium of 49.5% year-to-date relative to MAHB’s closing price of RM7.36 on December 29, 2023.
“Compared with the 10% YTD performance of the Bursa Malaysia KLCI benchmark index, the offer price premium is five times the KLCI’s performance,” the consortium stated.
Independent Directors’ View
On the other hand, five MAHB independent or non-interested directors have expressed their concerns over the offer, describing it as unfair and unreasonable. They suggested that the offer price represents a material discount of RM1.61 and RM2.71, or about 12.77% to 19.77%, of the value of MAHB shares, as estimated by Hong Leong Investment Bank.
GDA’s Concerns
GDA, however, believes that MAHB’s prospects are optimistic but unlikely to materialise without significant additional capital investment and the infusion of technical know-how. The consortium pointed to MAHB’s prolonged underperformance, both operationally and financially relative to peers, as a major concern.
“MAHB’s prolonged underinvestment had also resulted in its network of airports suffering in both the maintenance of core assets and systems, as well as in new projects to expand capacity,” GDA stated.
Market Share Loss
Furthermore, GDA highlighted that MAHB has been losing significant ground in the Asean aviation market, with its market share falling from 20% to 16% from 2013 to 2023. The consortium noted that MAHB’s market capitalisation grew only by 12.2% over the past 10 years, while its peers in the Asia-Pacific region increased by 216.8%.
Career Development
GDA emphasized its commitment to restoring MAHB’s competitive edge by ensuring talent is properly rewarded in alignment with contributions and achievements. The consortium believes that its offer will create a more attractive and stable environment for MAHB employees, allowing them to develop their careers and contribute to the company’s growth.
Conclusion
In light of the independent directors’ recommendations, GDA’s steadfast commitment to its offer price is a testament to its confidence in the privatisation proposal. The consortium’s concerns over MAHB’s underperformance and prolonged underinvestment suggest that it is committed to revitalizing the company and restoring its competitive edge.
FAQs
Q: Why is GDA refusing to budge on its RM11 per share offer price?
A: GDA believes its offer price represents a premium of 49.5% year-to-date relative to MAHB’s closing price, making it an attractive offer for shareholders.
Q: Why are independent directors recommending rejection of the offer?
A: The independent directors are concerned that the offer price represents a material discount of RM1.61 and RM2.71 of the value of MAHB shares, as estimated by Hong Leong Investment Bank.
Q: What is GDA’s plan to restore MAHB’s competitiveness?
A: GDA plans to infuse capital and technical know-how into MAHB to address its operational and financial underperformance, as well as loss of market share in the Asean aviation market.