After all, Ananda stands to be removing a whopping RM18.8bil in market capitalisation if he succeeds in privatising Measat Global Bhd and Tanjong plc, and if the recently privatised Astro All Asia Networks plc is included.
Some believe that Ananda has lost confidence in the Malaysian market and/or having a falling out with the powers-that-be which has resulted in him taking his companies of the stock market.
Others espouse the theory that Ananda is “asset stripping”, namely taking out the more valuable and growth driven overseas assets and only keen to bring back to Bursa Malaysia, the unexciting domestic assets.
Observers also recall the move in 2007, when soon after Maxis Bhd’s privatisation and de-listing, Ananda sold a 25% stake in Maxis to Saudi Telecom for US$3bil (RM9.5bil).
Chances are though, the deals have nothing to do with any loss of confidence. Rather, they are business decisions made primarily in the best long term interest of the major shareholders but done so with the least amount of unfairness to minority shareholders.
A banker involved in the deal says that the underlying rationale of all the privatisations are that the assets are going into a capital intensive period, whereby capital calls will be the norm and dividends and repayments the exception.
All the offer prices of the recent takeovers have come at a decent premium to the last traded market price. (See table)
In Tanjong’s case (the only of Ananda’s recent privatisations that the market was not expecting), there is the added conglomerate discount that it suffers from and the fact that since gaming was part of its core business, the stock could not be on the radar of syariah-compliant investors.
It is very likely that Ananda may rope in new investors into some of these privatised assets, possibly even at a higher price than the offer price. That should not be surprising, considering that he did it with Maxis.
New investors with longer term horizons may be invited in the form of equity or bonds or a combination of both.
“Malaysia has a deep enough bond market to absorb bonds based on the cash flows of a company like Tanjong,” said an investment banker.
“Recall also that the bonds that were issued post the privatisation Powertek Bhd have been well taken up by investors,” noted the banker. Powertek was taken private by Ananda’s vehicle Tanjong Energy Holdings Sdn Bhd in 2003.
Still, it is hard to take issue with the offer price for Tanjong shares at RM21.80 apiece, which is higher than even the highest analysts forecast price and at a decent 22% premium to the last traded price.
In Measat’s case though, Ananda does not come out looking as good, considering that the offer price of RM4.20 is not much above the price which Telekom Malaysia Bhd (TM) paid for its 15.39% stake in the satellite service provider in December 2003, following the latter’s listing via a reverse take-over exercise.
TM paid RM4.165 a share, an investment which it had written down over the years and Measat’s shares had failed to perform.
Yet, it is hard to argue with the rationale for Measat’s privatisation – that it needs some serious recapitalisation and restructuring in order for it to expand its satellite network.
Nonetheless, it’s the minority shareholders who decide.
If they think that the offers are not good enough and they want to stay in for the long term, they can simply refuse to accept.
If enough of them think that way, then neither Tanjong nor Measat need to be delisted.
Looking forward, analysts expect that Tanjong could come back into the stock market in another form, possibly with only power generation as its core business.
Market talk has it that Ananda could opt to sell off his numbers forecast operations, which is being hit by increasing competition and increased government duties.
There could also be a strategic investor coming into Tanjong’s capital intensive power generation business.
Not to be ruled out also is a reshaped Tanjong plc coming back into the equity market as a pure power play.
Behind The News - By RISEN JAYASEELAN
risen@thestar.com.my
No comments:
Post a Comment