KUALA LUMPUR: The Gateway Development Alliance Sdn Bhd consortium will unlikely revise its offer to take over Malaysia Airports Holdings Bhd (MAHB), after the latter's independent directors say there is "no compelling reason" to accept it.
A late statement issued by the Employees Provident Fund (EPF) yesterday, said GDA maintained its offer of RM11 per MAHB share.
The statement by the consortium - which comprises the EPF, Khazanah Nasional Bhd-backed UEM Group Bhd, Abu Dhabi Investment Authority (ADIA) and Blackrock Inc-backed Global Infrastructure Partners - followed MAHB independent directors' rejection of the offer.
Earlier, all five MAHB independent directors said in a circular that there were no compelling reasons for shareholders to accept the offer.
They said it did not reflect MAHB's full potential, considering its positive financial momentum, growth strategy and potential value accretion if it remains publicly traded.
This came as independent advisor Hong Leong Investment Bank Bhd (HLIB) recommended the airport operator's shareholders to accept the offer.
HLIB described the offer as reasonable due to MAHB's prolonged suppressed share price, although it is below its independent fair valuation of between RM12.61 and RM13.71 per share.
GDA said the prospects underlined in the rejection "are optimistic and unlikely to materialise without significant additional capital investment and an infusion of technical know-how".
MAHB's prolonged underperformance, both operationally and financially, relative to peers suggests execution of its plans will remain a challenge, it added.
MAHB "does not have a credible track record of delivery on its promises", it added, citing the suspended Aerotrain service, which MAHB had been working on replacing as far back as in 2017.
It also highlighted how MAHB had underinvested against peers, resulting in an ageing asset base that led to operational failures.
Concurrently, MAHB had lost its Asean aviation market share to just 16 per cent in 2023, from 20 per cent 10 years ago in 2013.
"Noting the significant investments in new capacity being made by competing airports such as Changi in Singapore and Suvarnabhumi in Bangkok, MAHB is at risk of continuing to lose market share without a long-term capital investment and planning horizon which can only be achieved in a private environment," GDA said.
The consortium added that it is committed towards maintenance and upgrade of airport infrastructure, enhancing passenger service levels and improving airline connectivity.
GDA also pointed out how MAHB's peers in Asia Pacific saw 18 times its market capitalisation growth in 2013-2023, as well as its dividend yield of one per cent as opposed to the regional peers' average of three per cent.
"MAHB's importance as a strategic Malaysian asset is reflected by an increase in the combined ownership in the company by UEM Group (a wholly-owned subsidiary of Khazanah) and the EPF from the current 41.1 per cent to a target 70 per cent, while the government continues to retain its golden share," it said.
"The consortium looks forward to working closely with the aspiring talent at MAHB and is committed to restoring its competitive edge - by ensuring talent is properly rewarded in alignment with their contributions and achievements.
"With its combined resources, control of the board and without the constraints of a public market listing, the consortium will be able to expedite necessary capital investments and provide the requisite technical expertise to realise MAHB's potential, to the benefit of all stakeholders," it added.
GDA's RM11 offer was 5.77% higher than MAHB's last traded price of RM10.40 before the May 15 privatisation announcement.
GDA forked out over RM12.3 billion for MAHB shares not held by the offering parties prior to the proposal announcement, and values MAHB at RM18.35 billion.
Prior to the takeover offer, Khazanah owned a 33.2 per cent stake in MAHB, while EPF held 7.9 per cent and ADIA, 0.13 per cent.