Tycoon Ananda Krishnan and associates will spend at least RM39.47 billion to privatise mobile operator Maxis in what could be Malaysia's biggest corporate deal.

Binariang GSM, an investment holding firm and special purpose vehicle for Ananda's Usaha Tegas and affiliates, said through CIMB Investment bank it would offer RM15.60 for the outstanding 2.53 billion shares in the company that Ananda does not already own.

"The consideration for the offer, to be satistifed in cash, is RM15.60," CIMB said in a notice.

CIMB said Binariang on Wednesday had obtained "irrevocable undertakings" from 15 firms who own a total 59.53 percent of Maxis to accept the offer.

Binariang would also buy shares owned by employees in Maxis, Malaysia's largest mobile operator, but CIMB did not give any figures.

"The consideration for the offer, to be satistifed in cash, is 15.60 ringgit," CIMB said in a notice.

Usaha Tegas and affiliates account for 46 percent of that total, with the remaining 13 percent owned by other private firms, CIMB officials said.

Maxis shares last traded at RM13 before they were suspended on the Malaysian bourse after reports about Ananda's plan to take full control of the company broke.

Expansion plans

Binariang chairman, Raja Arshad Raja Uda, said Maxis planned to make substantial investments to expand overseas and by taking full control, management will have greater flexibility to manage its capital expenditure.

He told reporters Maxis will likely be re-listed on Malaysia's bourse once its expansion plans have taken root and earnings have stabilised.

"The privatisation will eliminate the impact of earnings volatility on public shareholders," Raja Arshad said.

It will also "provide Binariang with the opportunity to consolidate the company and seek a fresh listing ... on Bursa Malaysia when it achieves a more stable earnings profile," he said.

The privatisation move comes amidst aggressive plans by Maxis to expand its operations in the region and move away from a saturated domestic mobile market, according to analysts.

Maxis has a 74 percent stake in Indian mobile operator Aircel, which it acquired last year. Last month, it raised its interest in Indonesian mobile firm PT Natrindo Telepon Seluler to 95 percent after buying 51 percent in 2005.

At a crossroads

Describing Maxis' future funding needs as "substantial", CIMB chief executive Nazir Razak said Maxis would likely tap the domestic bond market, particularly from Islamic issues.

"Binariang believes that Maxis has the potential to take greater advantage of growth opportunities in the region and elsewhere," Nazir told reporters.

Analysts estimate Maxis will need to make investments of more than US$5 billion over the next few years to tap the growth potential in India and Indonesia.

"The growth story for the Indian market is very strong in the next three to five years," OSK Research analyst Jeffrey Tan told AFP .

Reflecting the prospects, "valuations for telecom firms have increased sharply in the past two years," he said.

SJ Securities head of research, Cheah King Yoong, said Maxis "is at a crossroads.

"India and Indonesia offer a tremendous amount of growth but it will impact on earnings only in two to three years, while the domestic market is already saturated," Cheah said.

"But in three to four years, I won't be surprised if its overseas earnings will overtake its Malaysian earnings," he said.

Maxis is the seventh largest firm by market capitalisation and Cheah said its absence from the Malaysian exchange would create a vacuum.

"In the short-term, it will create some excitement in the market as people look for companies with privatisation potential," Cheah said.