Their stand contrasts with the assessment of independent adviser Hong Leong Investment Bank (HLIB), which stated that the offer by the consortium led by Khazanah Nasional Bhd, the Employees Provident Fund, and BlackRock-linked Global Infrastructure Partners (GIP) is “not fair but reasonable”.
The independent or non-interested directors are Mohamad Husin, Ramanathan Sathiamutty, Cheryl Khor, Koe Peng Kang and Chris Chia.
They said the offer price represents a substantial discount compared to MAHB’s estimated value per share.
“The offer price of RM11 is not fair as it is lower than and represents a material discount of RM1.61 to RM2.71 or approximately 12.77% to 19.77% to the value of per MAHB share as estimated by HLIB,” they said.
HLIB said the offer was unfair as it represents a 12.77% to 19.77% discount to their estimated fair value of between RM12.61 and RM13.71 per MAHB share, based on a sum-of-the-parts valuation.
Nevertheless, the investment bank said the offer price of RM11 represents a premium of RM6.11 or 124.95% to MAHB’s latest unaudited net asset per share of RM4.89 as of Sept 30.
In its independent advice circular to shareholders filed with Bursa Malaysia today, HLIB deemed the offer “reasonable in the absence of a competing offer”. It advised shareholders to accept the offer as it represents a chance for them to realise their investments.
In the same circular, the five non-interested directors disclosed that they have appointed UBS AG’s Singapore branch to assist with the assessment of the fair value of MAHB shares.
They said UBS arrived at an indicative range of equity value between RM18.26 billion and RM21.95 billion, translating to between RM10.95 and RM13.15 per MAHB share.
Why the offer is unreasonable
Beyond the share valuation, they strongly believed the offer is not reasonable due to MAHB’s positive financial momentum, clear growth strategy and trajectory, future prospects, and initiatives for development.
They argued there were no compelling reasons for shareholders to accept an offer that “does not adequately reflect MAHB’s full potential”.
“MAHB has embarked on plans to ensure it will continue capitalising on the anticipated traffic growth in future, underpinned by the strengthening economy and improved confidence in travelling,” they said.
They said MAHB has secured new operating agreements from the government that extends its concession for the management of 39 airports across the country until 2069, with capital recovery mechanisms that enable significant investments in capacity expansion at key airports.
They noted that MAHB has accelerated off-terminal initiatives such as the KLIA Aeropolis and Subang Airport Regeneration Plan, with several major projects already under way.
They also raised concerns that the proposed delisting of MAHB post-takeover would reduce its transparency, accountability, and ability to raise capital from public markets.
Ramanathan said MAHB operates under a cross-subsidy model where profitable airports fund the development of the smaller airports in Malaysia. He noted that there is no stated intention on whether this model will be sustained if the takeover happens.
“MAHB is not just a public-listed company providing value to shareholders, it is also a company that ensures national connectivity across the nation to drive national unity and integration,” he said.
The consortium and its related companies currently hold a collective 41.1% in MAHB. If the takeover, which was announced in May, is successful, the Malaysian members of the consortium will own 70% in MAHB while the foreign partners – GIP and Abu Dhabi Investment Authority – will take up the remaining 30%.
The success of the offer is contingent on the consortium acquiring at least 90% of the issued share capital, after which MAHB will be delisted from Bursa. Shareholders have until Jan 8 to decide on the offer.
MAHB’s shares closed 1.3% or 14 sen lower at RM10.50 today, valuing the group at RM17.52 billion.