TA SECURITIES Research has advised Malaysia Airports Holdings Bhd’s (MAHB) shareholders to accept the RM11 takeover offer by the Khazanah Nasional Bhd and Employees Provident Fund (EPF)-led consortium.
Deeming the RM11 privatisation offer price as “at record-high”, the research house expects “all shareholders to make some investment gains”.
“As such, we don’t think it is a daunting task (for the offeror) to achieve the 90% of valid acceptance,” projected analyst Tan Kam Meng in the results review of the airports operator’s 3Q FY2024 results.
“We maintain MAHB’s target price at RM11/share and advise the shareholders to accept the offer.”
Recall that the Khazanah and EPF-led consortium – which includes a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) and funds managed by Global Infrastructure Partners (GIP) – had on Nov 15 issued a formal offer following greenlight from foreign and domestic authorities.
However, the offer is still conditional in that the consortium is required to own at least 90% of MAHB – including shares already owned – on or before the closing of the offer.
As of Nov 15, the consortium and its parent companies in aggregate own 41.1% of MAHB’s issued share capital. The offer price values MAHB at RM18.4 bil or nearly 38 times its earnings in 2023.
Earlier on Nov 18, CIMB Securities Sdn Bhd also recommended that investors accept the RM11/share offer “to realise immediate gains”.
“Investors could also benefit from the joint offerors’ resources and vision for sustainable growth, making the proposal attractive,” the firm noted in a report.
“However, Malaysia’s long-haul connectivity challenges and the capital investment required for infrastructure upgrades may pose risks to MAHB’s organic growth.”
Meanwhile, TA Securities Research has also applauded MAHB’s latest set of 9M FY2024’s results after the group’s core profit having jumped 63.7% year-on-year (yoy) to RM566.7mil (after stripping out net writeback of impairment of RM49 mil and other exceptional items) on the back of 20.3% yoy rise in revenue to RM4.3 bil.
The research house attributed the decent performance to (i) increase in airline capacity which supported the growth in passenger movements and led to higher aeronautical revenue; (ii) tourist-friendly policy which boosted air travel demand; and (iii) increase in retail sales and rental income.
At 10.24am, MAHB was up 6 sen or 0.57% to RM10.62 with 72,200 shares traded, thus valuing the company at RM17.72 bil. – Nov 27, 2024
