KUALA LUMPUR, Dec 21 — Gateway Development Alliance Sdn Bhd (GDA), the consortium proposing to privatise Malaysia Airports Holdings Bhd (MAHB), remains steadfast on its RM11 per share offer price, despite recommendations from independent directors to reject it.
GDA comprises the Employees Provident Fund (EPF), Khazanah Nasional Bhd-backed UEM Group Bhd, Abu Dhabi Investment Authority and BlackRock-owned Global Infrastructure Partners (GIP).
In a statement on Friday (Dec 20), the consortium said it remained firm that the offer price of RM11 per share is an attractive offer to MAHB shareholders, as it represents a premium of 49.5 per cent year-to-date (YTD) relative to MAHB’s closing price of RM7.36 on Dec 29, 2023.
“This compares to the 10.0 per cent YTD performance of the benchmark index FTSE Bursa Malaysia KLCI, in which the offer price premium is five times the KLCI’s performance,” it said.
Yesterday, five MAHB independent or non-interested directors said, in an Independent Advice Circular (IAC) filed with Bursa Malaysia, that the offer is unfair and unreasonable and recommended that the shareholders reject the offer.
They believed that the offer price of RM11 is lower than and represents a material discount of RM1.61 and RM2.71 or about 12.77 per cent to 19.77 per cent to the value per MAHB shares ranging between RM12.61 and RM13.71 as estimated by Hong Leong Investment Bank (HLIB).
On that, GDA said while MAHB’s most recent performance indicates positive momentum, the consortium views that the prospects represented by the non-interested directors are optimistic and unlikely to materialise without significant additional capital investment and an infusion of technical know-how.
“MAHB’s prolonged underperformance both operationally and financially relative to peers suggests execution of its plans will remain a challenge, and MAHB does not have a credible track record of delivery on its promises,” it said.
GDA also gave an example of the suspension of the Aerotrain, saying that MAHB has been working on a replacement as far back as 2017 after several service failures, but the contract for the project was only awarded in December 2021 and the service was fully suspended since March 2023.
Apart from that, GDA said prolonged underinvestment has resulted in MAHB’s network of airports suffering in both maintaining the core assets and systems, as well as in new projects to expand capacity.
“MAHB has also been losing significant ground in the Asean aviation market with market share falling from 20 per cent to 16 per cent throughout 2013 to 2023,” it said.
Moreover, GDA said MAHB’s market capitalisation grew only by 12.2 per cent whilst its peers in the Asia Pacific (APAC) increased 216.8 per cent over the past 10 years, and also over a lower dividend yield of one per cent (per the offer price) compared to the DJ Airports Index’s three per cent.
“MAHB’s importance as a strategic Malaysian asset is reflected by an increase in the combined ownership in the company by UEM Group and EPF from the current 41.1 per cent to a target 70 per cent, while the government continues to retain its golden share.
“The consortium looks forward to working closely with the aspiring talent at MAHB and is committed to restoring its competitive edge by ensuring talent is properly rewarded in alignment with their contributions and achievements,” GDA said.
It added that with its combined resources, and control of the board, and without the constraints of a public market listing, it will be able to expedite necessary capital investments and provide the requisite technical expertise to realise MAHB’s potential, to the benefit of all stakeholders. — Bernama
