PETALING JAYA: A consortium led by Khazanah Nasional Bhd and the Employees Provident Fund (EPF) has proposed to privatise Malaysia Airports Holdings Bhd (MAHB) at RM11 per share, in a deal valued at over RM12bil.
In a filing with Bursa Malaysia yesterday, the airport operator said it had received a takeover offer from a group of investors through a consortium led by Khazanah, via the latter’s wholly owned subsidiary UEM Group Bhd, and the EPF to purchase all the remaining 1.12 billion shares in MAHB representing 67.01% of the total issued MAHB shares.
The offer price of RM11 per share would imply an equity value of RM18.4bil, translating to a price-to-earnings ratio of 37.7 times MAHB’s audited consolidated earnings per share for the financial year ended Dec 31, 2023.
Khazanah and the EPF are teaming up with New York-based Global Infrastructure Partners (GIP) and Abu Dhabi Investment Authority (ADIA) to form the consortium, Gateway Development Alliance Sdn Bhd, to take MAHB private. GIP is one of the world’s premier infrastructure investors and an experienced airport owner and manager.
Upon full completion of the offer, Khazanah will increase its ownership in MAHB from 33.2% to 40% and EPF from 7.9% to 30%. Collectively, Khazanah and the EPF’s combined interest in MAHB will increase to 70%. ADIA and GIP will hold the remaining 30%.
The government of Malaysia will retain special share rights in MAHB. The chairman and chief executive officer will continue to be Malaysian citizens, a joint statement by the offerors stated.
The takeover of MAHB is aimed at upgrading and modernising the company’s operations, enhancing passenger service, improving airline connectivity and stimulating traffic growth.
Presently, the country’s long-haul air connectivity underperforms regional peers, adversely impacting the nation’s ability to attract leisure and business travel as well as foreign investment, MAHB said.
The joint offerors said they had identified several priority initiatives to be undertaken upon completion of the exercise. This includes supporting MAHB to deliver high-priority capital projects including the aerotrain and the baggage handling system at Kuala Lumpur International Airport.
They also plan to enhance passenger experience by alleviating congestion, improving passenger flows and terminal ambience, as well as expanding the retail and food and beverage offering at MAHB’s airports.
The consortium will also work closely to support existing airlines and strengthen management resources to attract new airline customers to MAHB, particularly in the long-haul segment.
The joint offerors also confirmed that there are no plans for layoffs as a result of the transaction and that existing employment rights will be fully safeguarded.
Khazanah managing director Datuk Amirul Feisal Wan Zahir said Malaysia is strategically located in the fast-growing South-East Asian aviation market and has the potential to strengthen its long-haul and regional network.
“We are optimistic that the combined efforts of MAHB’s dedicated employees and the collective expertise of the consortium would catalyse MAHB as a leading international airport operator and stimulate economic growth through its airport network, in line with Khazanah’s goal of Advancing Malaysia.”
Meanwhile, EPF chief executive officer Ahmad Zulqarnain Onn said the offer is an investment opportunity that aligns with its investment objectives and commitment to bolster domestic investments.
“As an integral component of the national infrastructure, MAHB plays a vital role as a gateway for trade, tourism and business activities, contributing significantly to economic development and prosperity.”
MAHB manages 39 airports throughout Malaysia including five international airports, 17 domestic airports and 17 STOLports (Short Take-Off and Landing). MAHB also owns and manages one international airport in Istanbul, Turkiye.
The idea of having an external party to manage MAHB is not new. In 2019, it was reported that there were plans to privatise MAHB to GIP following Khazanah’s management changes.
In 2001, the Finance Ministry (then the largest shareholder of MAHB) had entered into a memorandum of understanding with Dutch airport operator Schiphol Group for the sale of up to a 30% stake in MAHB. However, the deal was aborted the following year.
The joint offerors said they have no intentions to maintain the listing status of MAHB on the Main Market of Bursa Malaysia and it is expected that MAHB’s shares would de-list from Bursa upon completion of the offer, which is estimated to occur in the fourth quarter of 2024.
MAHB shares were last traded at RM10.40 on Tuesday, 60 sen below the offer price of RM11.