Pay-TV operator Astro All Asia Networks (AAAN) will go private after its holding company, Astro Holdings, made a US$758m buyout offer to purchase the 27.1% it does not already own to delist the firm from the Bursa Malaysia.
AAAN is being advised by…
Pay-TV operator Astro All Asia Networks (AAAN) will go private after its holding company, Astro Holdings, made a US$758m buyout offer to purchase the 27.1% it does not already own to delist the firm from the Bursa Malaysia.
AAAN is being advised by Public Investment Bank, JPMorgan Securities, Kadir Andri & Partners, RHB Investment Bank and UBS. Astro Holdings is being advised by CIMB.
AAAN’s two principal shareholders are Usaha Tegas, controlled by billionaire recluse Ananda Krishnan, and Malaysian state investment firm Khazanah Nasional.
Astro Holdings, also headed by Krishnan, offered MR4.30 per share, a 21% premium on the firm’s last-traded price of MR3.56 before shares were suspended on March 15. The offer values AAAN at around US$2.5bn. AAAN shares skyrocketed 18% on news of the takeover.
ANNN said that the deal is aimed at “re-energising the company’s growth, both locally and internationally”, adding: “AAAN do not foresee any changes with the ongoing operations of the company and that the company will continue to be managed by the current board and management. As a publicly-listed entity, the substantial capital requirements needed for its growth plans may potentially strain the cash flow position and may impair AAAN’s dividend payment capability.”
Given that Krishnan’s telecommunications company Maxis Communications, was, as some sources say, “forced” to relist on the Bursa Malaysia last year at the behest of a Malaysian Prime Minister Najib Razak – in order to make the bourse more attractive for investors – it does seem odd that a firm in which the State holds a significant interest in is delisting. However, AAAN also said that a relisting would “certainly be considered when AAAN achieves a more stable earnings profile.”
An OSK research report said of the deal: “It’s a fair and rather attractive offer. It would be a good exit strategy for the remaining shareholders given that Astro’s share price has been lingering below the MR4 level since the second half of 2007.”
By taking the firm private, Krishnan hopes to speed up investments in India, China and Malaysia without the need for shareholder approval.
Tatparanandam Ananda Krishnan was born in the Brickfields district of Kuala Lumpur, known as “Little India”, to ethnic Tamil parents who hailed from Sri Lanka. Krishnan is now one of Malaysia’s wealthiest individuals, worth an estimated US$7.6bn, after pursing interests in various sectors including gaming, power, real estate, marine transport and oil and gas.