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 Bhd (MAHB).
As of 5pm on Wednesday, 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 deadline 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 deadline to 5pm on Jan 17. The extension provides the Khazanah Nasional Bhd-led consortium, which also includes the Employees Provident Fund (EPF), Abu Dhabi Investment Authority and Global Infrastructure Partners, additional time to achieve the required acceptance level.
In a Bursa Malaysia filing, GDA said 83.04 per cent of shares are 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. Together, it represents 84.1 per cent of the total number of issued shares in MAHB.
GDA said the strong level of acceptance positions the consortium to meet the 90 per cent requirement for delisting MAHB.
The formal takeover offer for MAHB was announced in November.
A COMPELLING PROPOSITION
The Consortium asserts that its RM11 per share offer is highly attractive. This price exceeds any level MAHB has traded historically and reflects a 49.5 per cent premium year-to-date, corresponding to a price-to-earnings ratio of 37.7 times.
MAHB's share price climbed on Tuesday following the acceptance of a takeover offer by Retirement Fund Inc (KWAP).
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 from GDA.
According to a filing with Bursa Malaysia, the shares were disposed of on Jan 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 Bhd, which in turn is wholly owned by Khazanah. KASB is wholly owned by EPF.
Meanwhile, 14 analysts covering MAHB have set target prices at or below RM11, with most recommending that shareholders accept the offer.
MIDF Research, in a note on Tuesday, 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 stock valuation of 7.1 times financial year 2024 enterprise value over earnings before interest, taxes, depreciation and amortisation.
CONSORTIUM'S VISION FOR MAHB
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.
MAHB has underperformed its Asia Pacific peers across several financial metrics over the last decade. Moreover, dividend payouts have stagnated, with 11 sen per share distributed last year (divided by the offer price of RM11), representing a yield of just 1.0 per cent, significantly lower than the FTSE Bursa Malaysia KLCI and the DJ Airports Index.
The RM11 offer significantly outweighs the 82 sen in total dividend MAHB has paid over the last 10 years.
The consortium believes that MAHB's underperformance, along with its inability to maintain core assets and systems, can only be addressed by delisting the company and adopting a more strategic and focused approach.
A clear example is the aerotrain at the Kuala Lumpur International Airport (KLIA) Terminal 1, which has experienced repeated service failures. After nearly two years of suspension, the aerotrain's reopening date remains uncertain.
One of the primary issues facing MAHB is underinvestment of critical infrastructure and growth initiatives. Over the past five years, MAHB allocated only RM1.3 billion in capital expenditure.
This lack of investment has resulted in an ageing infrastructure base and operational failures.
Passenger satisfaction at MAHB's airports has deteriorated, as seen in KLIA's fall in Skytrax rankings from the world's second-best airport in 2001 to 71st in 2024.
Over the past decade, KLIA passenger volumes have declined, while regional competitors such as Singapore's Changi Airport and Bangkok's Suvarnabhumi Airport achieved substantial growth. As a result, MAHB's market share fell from 20 to 16 per cent.
To address these challenges, MAHB's airports require significant investment in remediation and expansion.
The consortium views privatisation as essential to the implementation of bold, long-term strategies, free from the constraints of public market pressures.
With its combined resources, control of the board and without the constraints of a public market listing, the Consortium is committed to work together with management in expediting necessary capital investments and providing the requisite technical expertise to realise MAHB's full potential.