THE privatisation of Malaysia Airports Holdings Bhd (MAHB) has sparked significant debate but much of the criticism has been mired in inaccuracies and sensationalism.
Claims that rules are being bent to favour the Gateway Development Alliance (GDA) consortium ignore the clear provisions of Malaysia’s regulatory framework and the historical precedents that support such revisions.
Allegations of “rule-bending” surrounding the reduction of the acceptance threshold from 90% to 85% and the extension of the offer period to Feb 4 are not based on facts but also fail to account for the Securities Commission Malaysia’s (SC) explicit rules on takeovers.
The revision of the acceptance threshold and associated timeline adjustments are fully compliant with the SC’s Rules on Takeovers, Mergers and Compulsory Acquisitions.
The notes to Paragraph 6.01 explicitly permit offerors to revise the acceptance condition to a lower level provided it remains above 50%.
Furthermore, the rules stipulate that the offer must remain open for at least 14 days following the revision while shareholders who have already accepted must be allowed to withdraw their acceptances within eight days of the change.
By adhering to these requirements, GDA has acted within the bounds of regulatory norms.
Adherence to norm
Historical precedents also reinforce the legitimacy of such revisions. For instance, the 2017 privatisation of Hovid Bhd saw the acceptance condition revised twice – initially from 90% to 75% and later to 67%.
These adjustments complied with regulations and demonstrate that flexibility in acceptance thresholds is a recognised mechanism to facilitate the completion of complex transactions.
When GDA launched the offer on Dec 6 last year, it set several conditions, including a 90% acceptance level for the offer to become unconditional.
Notably, this threshold was self-imposed as the takeover code typically requires a minimum threshold of just 51% for most offers.
The higher threshold was designed with the intention of delisting MAHB. However, with the consortium achieving an acceptance level of 86.51% as of the latest announcement, the revised 85% threshold has rendered the offer unconditional, paving the way for shareholders who accepted the offer to receive prompt payment.
The extension of the offer period is equally grounded in precedent.
Similar strategies have been employed in past privatisation efforts such as GHL Systems Bhd in 2024 which involved two extensions to raise the offeror’s shareholding from 97.51% to 98.82% and Boustead Plantations Bhd’s 2023 privatisation where deadlines were extended to secure a higher acceptance rate.
These examples highlight that extensions and threshold revisions are common features of takeover processes; they are designed to balance the interests of all stakeholders and ensure successful outcomes.
Bounded by transparency
Rather than signalling impropriety, the consortium’s actions reflect a commitment to transparency and regulatory compliance.
By ensuring ample time for shareholders to evaluate the revised offer and its implications, GDA demonstrates responsible corporate governance.
Allegations of “strong hidden hands” manipulating the process not only lack merit but undermine the credibility of institutions like Khazanah Nasional Bhd, the SC and the Employees Provident Fund (EPF) which are bound by high governance standards.
Ultimately, the adjustments to the acceptance threshold and timelines should be seen as pragmatic measures aimed at achieving a successful transaction.
Endorsed by independent research houses, the offer’s fairness and the overwhelming support of over 86% of shareholders underscore its viability and the confidence investors have in the consortium’s vision for MAHB.
Rather than maligning the process, stakeholders should recognise the potential it holds for transforming MAHB into a leading regional player, thus benefiting Malaysia’s aviation sector as a whole.
At 10.49am MAHB was up 2 sen or 0.18% to RM10.96 with 1.96 million shares traded, thus valuing the airports operator at RM18.29 bil. – Jan 24, 2025
Main image credit: Places Malaysia/Facebook via @aia.aizatahmad
