Gateway Development Alliance Sdn Bhd (GDA) and its shareholders (the consortium) have received valid offer acceptances of 1.40 billion shares, representing 84.1 percent of the total number of issued shares in Malaysia Airports Holdings Bhd (MAHB).

The conditional voluntary take-over offer was made through GDA and the joint offerors are Gateway Development Alliance Sdn Bhd, Pantai Panorama Sdn Bhd (PPSB), Kwasa Aktif Sdn Bhd (KASB), and GIP Aurea Pte Ltd (GIP Aurea), the consortium said in a filing to Bursa Malaysia today.

On the breakdown, total MAHB shares held by the joint offerors and the joint ultimate offerors stood at 1.39 billion while MAHB shares transferred to the joint offerors but pending receipt of the acceptance document (which are subject to verification) stood at 18.18 million.

In a separate statement today, GDA said the encouraging level of acceptances by the first closing date, despite the intervening holiday period, moves the consortium decisively towards satisfying the 90 percent acceptance condition, and thus the threshold required to de-list MAHB under the offer.

“This encouraging number of acceptances received to date of 84.1 percent moves the consortium decisively toward the 90 percent acceptance threshold required to finalise the privatisation of MAHB,” it added.

The consortium said for shareholders who have yet to submit their acceptances, the consortium is extending the offer period to Jan 17, 2025, from today with the offer price maintained at RM11 per share.

“GDA stands firm on its offer price of RM11 per share, deems it fair and advantageous as it values MAHB above its historical share price and trading multiples, and represents a 49.5 percent premium relative to MAHB's closing share price for the financial year 2023 and is higher than any price MAHB has ever traded at,” it reiterated.

The offer further reflects an enterprise value/adjusted earnings before interest, taxes, depreciation, and amortisation multiple of 13.9x and a price-to-earnings ratio of 37.7x based on MAHB’s latest audited consolidated financial statements.

The take-private offer, first announced in May 2024 and formally launched on Nov 15, 2024, is strategically designed to position MAHB for enduring, sustainable growth.

“The consortium wishes to reiterate its views in that while MAHB’s most recent performance indicates positive momentum, the airport operator’s failure to maintain its core assets and systems and prolonged under-performance, both operationally as well financially relative to peers, suggests execution of its plans will remain a challenge,” it said.

Evident of this is MAHB’s investments over the last five years where it spent just RM1.3 billion compared to Changi Airport’s RM18.9 billion, RM8.1 billion by Indonesia’s Angkasapura I and II, and RM6.8 billion by Airports of Thailand.

This under-investment by MAHB has resulted in an ageing asset base which has led to high-profile operational delays and failures in recent years.

MAHB’s airports are in urgent need of significant remediation spending as well as new capital to fund much-needed expansion.

These challenges have contributed to the underwhelming performance of MAHB shares, which saw only a 12 percent increase in market capitalisation from 2014 to 2023, starkly lagging behind Asia Pacific peers’ average 217 percent surge.

Moreover, its dividends have remained at four times lower than the KLCI average, with the RM11.00 per share offer standing at 13 times the cumulative dividends paid over the past decade.

On the offer price, the consortium said the RM11 offer recognises the critical necessity for substantial investment to rejuvenate MAHB, equipping it to compete effectively with regional peers after a decade of lagging performance.

“The consortium is committed to positioning MAHB for long-term sustainable growth by focusing on the maintenance and upgrade of airport infrastructure, enhancing passenger service levels and improving airline connectivity,” it added.

The consortium also emphasised that as part of this strategic transformation, GDA will focus on strategic restoration and upgrades to ensure MAHB is competitive while unlocking additional efficiency gains on its existing infrastructure. 

“A key component of this strategy involves ensuring an optimal amount of capital expenditure, with a strong emphasis on enhancing passenger comfort and experience, as well as supporting airline partners,” it said.

The consortium said it is confident that MAHB’s transformation is best realised as a private entity, facilitating a strategic, long-term approach to decision-making and capital investments.

Should the acceptance level fall below 90 per cent, the consortium said it will explore alternative avenues to de-list MAHB from Bursa Malaysia, ensuring optimal results for the company’s future.

- Bernama

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