Local funds said to be paying RM4.90-RM5 for Maxis

Written by Financial Daily
Tuesday, 27 October 2009 12:10

KUALA LUMPUR: Response to Maxis Bhd’s share sale, Malaysia’s largest initial public offering (IPO), is said to be tepid thus far, with asking prices said to be near the lower end of the RM4.80 and RM5.50 price range that book-runners are indicating.

“We understand current prices are between RM4.90 and RM5, thereabouts. We were told one or two are at RM5.20, but very few are willing to pay that much,” a local fund manager said.

He noted that pilgrims’ fund Lembaga Tabung Haji (LTH) chief investment officer Mohammed Noor Abdul Rahman had publicly declared his fund would not pay more than RM5.20 apiece for Maxis shares.

The fund manager is picking up Maxis shares “for benchmarking purposes”.

Citing sources, The Edge weekly reported over the weekend that Permodalan Nasional Bhd was heading the queue for Maxis shares — asking for as much as 20% of the 862.5 million shares earmarked for bumiputera investors.

Other buyers include the Employees Provident Fund (EPF) Board and LTH, but were asking for smaller stakes than PNB, the report read.

Maxis is set to launch its prospectus tomorrow, in conjunction with its marketing exercise for Malaysia from Oct 28 to Oct 30. Marketing started in Hong Kong last Friday and proceeded to Singapore yesterday, continuing on today. Sales presentation to investors in Europe and the US are slated between Nov 2 and Nov 9.

The final retail and institutional price for the Maxis shares are to be fixed by Nov 10, after the conclusion of the book-building exercise on Nov 9.

Shares of the country’s leading mobile operator are set to debut again on the Main Market in a little over three weeks on Nov 19.

The indicative price range of RM4.80 to RM5.50 values Maxis at between 16 and 18 times estimated earnings, making the stock pricey compared to rivals like DIGI.COM BHD [], analysts have said.

DiGi, which ended at RM21.52 yesterday, was trading at 15.7 times FY09 earnings and is offering some 8% yield, Bloomberg data showed.

Shares of TELEKOM MALAYSIA BHD [], another relatively smaller capitalised dividend play, was offering close to 8% yield at its RM3.06 close yesterday, according to Bloomberg data.

Maxis’ owners are offering for sale 2.25 billion shares, valuing the company between RM36 billion and RM41.25 billion.

Some 91% of the shares are slated for institutions, while 150 million shares or 6.7% of the total offered shares are for the general public. Retailers are expected to get about 5% to 10% discount on the institutional price.

The “old” Maxis, which includes operations in India and Indonesia, was valued at RM39 billion when taken private in July 2007. Maxis, which is only floating its Malaysian operations this time around, will have a RM39 billion market capitalisation if its shares are quoted at RM5.20 apiece.


This article appeared in The Edge Financial Daily, October 27, 2009.