Ananda Krisnan relisted Maxis but taking Astro private.
Tycoon T. Ananda Krishnan, Khazanah Nasional Bhd and partners have offered to buy out minority shareholders of Astro All Asia Networks plc in a cash deal that values the pay-television operator at RM8.5 billion.
Shareholders stand to get RM4.30 (5076) for each share held, which is a 21 per cent premium to the stock’s last traded price of RM3.56.
The offer was made late yesterday by special purpose vehicle Astro Holdings Sdn Bhd, whose main shareholders are Ananda’s Usaha Tegas Sdn Bhd and affiliates, Khazanah and Bumiputera foundations. Together, they own 72.9 per cent of Astro.
The company does not intend to keep Astro listed and, if all goes well, it will be delisted sometime in the middle of June, said CIMB Investment Bank, the adviser to Astro Holdings.
The move to take Astro private is to facilitate plans to make it a leading regional integrated media group.
Astro needs to spend substantially – between RM3 billion and RM3.5 billion over the next three years – to accelerate its domestic and international growth, inclu-ding in migrating to high-definition television, said Datuk Seri Nazir Razak, group chief executive of CIMB Group Holdings Bhd, which owns CIMB Investment.
The substantial investments would strain the company’s gearing and limit its ability to pay dividends, he added.
“A private status would give us greater flexibility to achieve this goal of expansion. We believe the deal offers minority shareholders an attractive price while not subjecting them to the associated risks of the company’s next growth phase,” Nazir told reporters at a briefing late yesterday.
Taking it private will also let the owners have more freedom in making corporate decisions without having to seek shareholders’ approval.
The reasons for the exercise were similar to that cited when another of Ananda’s companies, Maxis Communications Bhd, was taken private in 2007.
Maxis, after being privatised, took on a foreign partner in the form of Saudi Telecom, and a revamped version of the company, comprising only the domestic operations, was listed just last year.
Nazir said a relisting of Astro would be considered once it achieved a more stable earnings profile.
The Astro privatisation will go through if there is acceptance of more than 90 per cent of the shares.
Astro Holdings will have to come up with some RM2.4 billion to buy the minority portion. CIMB is leading a consortium of banks to arrange the financing.
Nazir is confident the deal will go through as the offer price is “fair”, coming in above analysts’ average targets of about RM3.70 for the stock.
“It’s a good price. I think they’ll have no problems taking it private,” said Yeonzon Yeow, head of research at Kenanga Research, which had a target price of RM3.65 for Astro.
RHB Investment Bank Bhd and UBS Securities Malaysia Sdn Bhd are the advisers to Astro in the deal, while the independent financial advisers are Public Investment Bank Bhd and JPMorgan Securities (Malaysia) Sdn Bhd.
Meanwhile, Astro chairman Datuk Badri Masri said the company would continue to be managed by the current board and management.
Astro owns 20 per cent of India’s Sun Direct TV, a direct-to-home service which is still loss-making, as well as businesses in China (library and content development) and a new Internet Protocol television initiative in Australia, the Middle East and North Africa.
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