"That's because in deciding for privatisation, the deal hugely favours the controlling party already - hence someone must look out for the long-suffering small tenacious investor"
May 3 (Bloomberg) -- T. Ananda Krishnan, Malaysia's second- richest man, offered to buy full control of Maxis Communications Bhd. for 15.8 billion ringgit ($4.6 billion) in Asia's biggest telecommunications acquisition in three years.
Binariang GSM Sdn., owned by Krishnan, offered to buy 40 percent of Maxis at 15.60 ringgit each, 20 percent higher than the closing price on April 27 before the stock was suspended for the announcement, CIMB Investment Bank Bhd. said in a statement today. The purchase values the company at 39.5 billion ringgit.
That's bloody close to the 41bn ringgit heard over the weekend. However, I am in agreement with Moola that the offer is too low, and probably will not succeed. Moola has posted his own valuation on Maxis, which places it at RM24.00. I think a fair price for the VGO is in the region of RM17.50-RM18.00. Since its Binariang making the incestuous offer to Maxis, let's see how professional the Board is at Maxis, and let's see how independent are the independent directors there, and let's see if Bursa and the SC try to protect the interests of the tenacious minority shareholders.
If you add back the depreciation of 1.014 billion, Maxis operations generated 3.352 billion ringgit!! ... consider that you have cash and you want an investment that can generate 3.352 Billion ringgit, how much do you reckon that you have to invest in a business that generates say 6%.
Is 6% a good return?
It's simple math. How much would you need to invest at 6% to generate a return of 3.352 billion? Answer? 3.352 divided by 6% = RM55.4 billion!! If someone offered you less, would you accept?
To grow in India, Indonesia and locally in broadband and 3G, the funding requirements are huge, but that is not really an issue, said Jamaludin. This year alone, the company needs RM2.77bil (of which RM1.57bil is for India and RM1.2bil for Malaysia) and in India alone..And this is confirmed if you look at the cash flow. If you are a current shareholder of Maxis, your share of this 2.725 Billion has already being invested in India and Indonesia by Maxis. How should there be a value placed on these investments? So how much does Usaha Tegas wants to offer you?