Meaningful Deal Sealed: MAHB Set for Transformation - Economist 

KUALA LUMPUR Jan 20  – Malaysia Airports Holdings Berhad (MAHB) is poised for a significant turnaround as Gateway Development Alliance (GDA) edges closer to completing its privatization.

With the acceptance threshold lowered to 85% and 86.5% of shares already secured, the delisting process is nearly finalized.

Shan Saeed, Global Chief Economist at Juwai IQI, hails this move as a game-changer, emphasizing, “This deal solidifies confidence in MAHB’s potential to make a turnaround, paving the way for strategic transformation and long-term growth.”  
 

Shan Saeed

Shan shared his views following Gateway Development Alliance's (GDA) Joint Press Release issued earlier today. The press release outlines a clear roadmap for the privatization of Malaysia Airports Holdings Berhad (MAHB).

With the offer now declared unconditional, the focus has shifted toward finalizing the delisting process.

This transaction represents a pivotal moment for MAHB, promising significant transformation to enhance its competitiveness and operational efficiency under the Consortium's leadership.

Shareholders are encouraged to assess their options carefully, taking into account the reduced liquidity risks associated with delisting and the premium offer being presented.

1. A Strategic Milestone

The lowering of the acceptance threshold to 85%, coupled with already securing 86.5% acceptances, demonstrates GDA’s commitment to finalizing the deal. Shan elaborates, “Historically, index funds hold about 4% of MAHB. Once they sell, the Consortium’s ownership will jump to 90%, enabling them to take MAHB private. This solidifies confidence in the privatization process.”

The delisting of MAHB from Bursa Malaysia is imminent, with the remaining shares expected to be tendered before the revised closing date of 4 February 2025.

Concurrently, the Consortium has revised the closing date of the offer to 4 February 2025, (the last day the offer can become unconditional) and declared that its offer price of RM11.00 is final and will not be revised further.  

The offer price, payable wholly in cash shortly after the offer is declared unconditional, provides shareholders a substantial 44%.

Delisting also mitigates liquidity risks for those still holding shares post-privatization.

2. Turnaround Potential

Shan underscores the importance of this deal for MAHB’s future, stating, “This deal looks solid on paper. The Consortium is committed to transformation, not backing out. It’s time to focus on implementing privatization to ensure MAHB benefits from the Consortium’s combined resources and expertise.”

The Consortium’s plan for substantial capital infusion will address pressing issues like ageing infrastructure and enable MAHB to enhance its operational efficiency.

“MAHB gets the attraction back from investors, which is a testament to its potential to make a turnaround,” Shan told DagangNews.com. Privatization creates opportunities to overcome current challenges, setting a foundation for long-term growth.

GDA in previous statement remain steadfast on its RM 11 per share. Share price has increased 5% since the takeover bid.

3. Strategic Transformation for Regional Competitiveness

The move to privatize MAHB is more than a financial transaction; it is a step toward reshaping the company’s future.

Shan highlights the broader implications: “From the corporate strategy point of view, it bolsters MAHB to transform its operations, making it competitive regionally and benefiting customers, valued passengers, airlines, and key stakeholders.”

The deal provides forward guidance, enabling MAHB to evaluate strategic options proactively and confidently set a new direction. Shan adds, “This balance is essential to overcoming pressing issues while addressing future obstacles.”

4. Leadership and Execution

The success of this transformation hinges on MAHB’s leadership team and workforce navigating the transition effectively. Shan is optimistic, noting, “MAHB’s leadership team and workforce can manage this period of transition and uncertainty smartly. This is key to successfully implementing both short- and long-term strategies.”

Conclusion: A Solid Path Forward

The privatization of MAHB by GDA marks a pivotal moment in its history. With the Consortium’s financial strength and strategic insight, MAHB is set to overcome operational challenges and emerge as a competitive player in the regional aviation industry. Shan aptly concludes,

“This deal offers good vibes in the market and serves as a guide for future strategic opportunities. With the right execution, MAHB can achieve a meaningful turnaround, benefiting all stakeholders involved.” - DagangNews.com