PETALING JAYA: Billionaire T. Ananda Krishnan is exploring the possibility of taking Astro Malaysia Holdings Bhd private again.
According to industry sources, Ananda, who owns 40% of the pay-TV operator, is looking at a corporate exercise to take out the rest of the shareholders in the company via his private vehicle Usaha Tegas Sdn Bhd.
According to Astro’s annual report, apart from Ananda, the other major shareholder in the company is Khazanah Nasional Bhd, through a privately held company Pantai Cahaya Bulan Ventures Sdn Bhd. The other major shareholder is Harapan Terus Sdn Bhd, private company that is controlled by Datuk Badri Masri, Tun Mohammed Hanif Omar and Mohamad Shahrin Merican that has 8.8%.
“The exercise is still in preliminary stages and details have yet to be finalised. Usaha Tegas feels that the market is not valuing the company fairly,” said a source.
Listed at RM3 a share in October 2012, Astro’s share price has hovered below that level.
It peaked at RM3.32 on June 13, 2014.
In January this year, Astro’s share price hit a three-year low of RM2.34, its lowest since November 2012.
The company had come under pressure due to competition from over the top service providers such as Netflix and iflix and because of the weaker ringgit, which also meant that it had to cough up more to pay for global contents.
Yesterday, Astro closed seven sen higher at RM2.70, below its initial public offering (IPO) price. When it was listed in 2012, the Employees Provident Fund (EPF) did not participate the IPO because it felt that the valuations were high. However, the pension fund is now among the company’s substantial shareholders, accumulating the stock at lower prices.
Based on previous takeover exercises, Ananda is known not to stinge on taking his companies private, and is likely to offer a fair price to shareholders for the takeover.
“However, it would be interesting to see how much Usaha Tegas would want to offer for Astro, if it decides to go ahead with the exercise, considering the challenging landscape,” said the source.
Astro had first been listed as Astro All Asia Networks Plc on Oct 29, 2003, but was taken private on June 14, 2012. In its first listing, the IPO was at RM3.65 a share.
After Measat-1’s launch into space in 1996, Astro quickly spread its coverage and became Malaysia’s first satellite pay-TV operator.
In 2010, its shareholders including Ananda offered to take the company private for a price of RM4.30 per share.
The company had a market capitalisation of RM8.3bil at that time.
On Oct 19, 2012, Astro was re-listed, minus its overseas assets, as Astro Malaysia Holdings Bhd with an IPO price of RM3 per share. It was reported that this valuation was at a price-to-earnings ratio of 24 times.
The overseas operations included its investments in India, which had not done well.
The company garnered RM4.55bil for its IPO, and was the country’s third-largest IPO in the year behind IHH Healthcare Bhd and Felda Global Ventures Holdings Bhd .
Even without the EPF’s participation in the listing, Astro Malaysia’s IPO attracted fairly strong interest from other institutional investors, who bid for 30 times more stock than they had been allocated.
When it was listed, it was reported that Astro Malaysia had secured 22 cornerstone investors, including tycoon Tan Sri Chua Ma Yu, Kencana Capital Libra Investment Sdn Bhd and Great Eastern Life Assurance.
However, Astro Malaysia’s listing didn’t meet the expectations of the new shareholders when the stock opened with a 1% premium to its IPO price of RM3 a share and closed the day unchanged from the price shareholders had paid.
Apart from Astro, Ananda had previously delisted and relisted other undervalued companies under his stable such as Maxis Bhd and Bumi Armada Bhd .
Bumi Armada was taken private by Ananda in 2003 and re-listed on Bursa Malaysia in 2011 at an IPO price of RM3.03.
Maxis Communications Bhd was privatised in 2007 and relisted three years later minus its overseas operations as Maxis Bhd.