KUALA LUMPUR: Gateway Development Alliance Sdn Bhd (GDA) and its shareholders, collectively referred to as the "consortium," are nearing the 90 per cent acceptance threshold required to delist Malaysia Airports Holdings Berhad (MAHB).
As of 5:00 p.m. on January 8, the consortium reported valid acceptances for 1.4 billion shares, representing 84.12 per cent of MAHB's total issued shares. This marked the end of the consortium's original timeline to meet the 90 per cent acceptance rate, a key condition of the voluntary offer.
Earlier in the week, GDA and MAHB announced an extension of the timeline to 5:00 p.m. on January 17. The extension provides the Khazanah Nasional Bhd-led group, which also includes the Employees Provident Fund (EPF), Abu Dhabi Investment Authority (ADIA), and Blackrock Inc.-backed Global Infrastructure Partners (GIP) additional time to achieve the required acceptance level.
In a separate Bursa Malaysia filing, GDA disclosed that 83.04 per cent of shares are currently held by the consortium and its associates. An additional 1.09 per cent of shares have been transferred to the purchasing group, pending receipt of acceptance documentation.
GDA noted that the strong level of acceptances by the First Closing Date, despite the holiday season, positions the consortium favorably to meet the 90 per cent acceptance requirement for delisting MAHB.
The formal takeover offer for MAHB was initially announced in November following regulatory approvals.
RM11.00 Offer Price: A Compelling Proposition
The consortium asserts that its RM11.00 per share offer is highly attractive to shareholders. This price exceeds any level MAHB has traded at historically and reflects a 49.5 per cent premium year-to-date (YTD), corresponding to a price-to-earnings ratio of 37.7x.
Shares of MAHB climbed on Tuesday following the acceptance of a takeover offer by Kumpulan Wang Persaraan (Diperbadankan) (KWAP). At 10 am, MAHB's shares were up eight sen, or 0.75 per cent to RM10.72, giving the company a market capitalisation of RM17.89 billion.
KWAP and its affiliates sold 119.25 million shares this week, representing a 7.15 per cent stake in MAHB, as part of the takeover offer from GDA.
According to a filing with Bursa Malaysia, the shares were disposed of on January 6 at RM11 per share.
The disposal by KWAP followed an extension of the deadline for accepting GDA's takeover offer. The offer was made jointly by GDA, Pantai Panorama Sdn Bhd (PPSB), Kwasa Aktif Sdn Bhd (KASB), and GIP Aurea Pte Ltd for shares not already owned by the offerors.
GDA is collectively owned by PPSB, KASB, and GIP Aurea. PPSB is wholly-owned by UEM Group Berhad, which in turn is wholly-owned by Khazanah. KASB is wholly-owned by the EPF.
Meanwhile, all 14 licensed equity research analysts covering MAHB have set target prices at or below RM11.00, with most explicitly recommending shareholders accept the offer.
MIDF Research, in its note on Tuesday, recommended investors accept the RM11 offer.
The firm said the offer represents an 18 per cent premium over its fair value estimate of RM9.32 and a 125 per cent premium over MAHB's latest net asset per share of RM4.89, with the current stock valuation of 7.1 times FY2024 enterprise value over EBITDA (earnings before interest, taxes, depreciation, and amortisation).
Consortium's Vision for MAHB: Transforming for Sustainable Growth
The consortium aims to foster long-term sustainable growth for MAHB by prioritising the maintenance and enhancement of airport infrastructure, improving passenger services, and strengthening airline connectivity to drive traffic growth.
MAHB has underperformed its APAC peers across several financial metrics over the last decade. Moreover, dividend payouts have stagnated, with RM0.11 per share distributed in 2024 (divided by the offer price of RM11.00), representing a yield of just 1.0 per cent—significantly lower than the KLCI Bursa Malaysia Index and the DJ Airports Index.
The RM11.00-per-share offer significantly outweighs the RM0.82 in total dividends MAHB has paid over the last 10 years, offering shareholders immediate and attractive returns.
The consortium believes that MAHB's operational and financial underperformance, along with its inability to effectively maintain core assets and systems, can only be addressed by delisting the company from public markets and adopting a more strategic and focused approach.
A clear example of these challenges is the Aerotrain at KLIA Terminal 1, which has experienced repeated service failures over the past decade. After nearly two years of complete suspension, the Aerotrain's reopening date remains uncertain, underscoring the urgent need for improved asset management.
One of the primary issues facing MAHB is its chronic underinvestment in critical infrastructure and growth initiatives. Over the past five years, MAHB allocated only RM1.3 billion to capital expenditure (capex), significantly lagging behind its regional peers.
This lack of investment has resulted in an ageing infrastructure base and a series of high-profile operational failures.
Passenger satisfaction at MAHB airports has deteriorated significantly, as evidenced by KLIA's fall in Skytrax rankings, from being the world's 2nd-best airport in 2001 to 71st in 2024.
Meanwhile, over the past decade, KLIA's passenger volumes have declined, while regional competitors such as Singapore's Changi Airport and Bangkok's Suvarnabhumi Airport have achieved substantial growth. As a result, MAHB's market share fell from 20 per cent to 16 per cent, as competitors continue to invest heavily in expanding capacity and improving services, further widening the gap.
The consortium views privatisation as essential to enabling the company to implement bold, long-term strategies, free from the constraints of public market pressures, in a bid to position it as a leading player in the regional aviation market.
With full control of the board and access to significant resources, the Consortium is committed to expediting necessary capital investments and positioning MAHB to realise its full potential.