Estates of late tycoons spark M&A interest

WHILE it is still unclear as to how the assets of the two tycoons who passed away recently will be dealt with, mergers and acquisitions (M&A) experts are working overtime to suss out potential deals.

In November, former Finance Minister Tun Daim Zainuddin and businessman T Ananda Krishnan passed away, leaving observers to speculate that some of the assets in their estates could be up for sale.

The late Daim had amassed a substantial empire, encompassing over 30 companies in industries such as property development, hospitality and materials.

One such asset is the publicly listed Avillion Bhd, in which Daim’s son – Datuk Md Wira Dani – is the largest shareholder, with a 21.82% stake.

Known for its hotel chain, Avillion has struggled financially in recent years, but its properties in Port Dickson, Pangkor and Cameron Highlands could attract buyers, considering their strategic locations and Malaysia growing tourism prospects.

As for the late Ananda, it is common knowledge that his empire includes valuable assets such as Maxis Bhd, in which he holds a 62.3% stake, Astro Malaysia Holdings Bhd (41.3%) and Bumi Armada Bhd (34.6%), all held via Usaha Tegas Sdn Bhd.

M&A experts are most excited about Maxis, a dominant and profitable player in Malaysia’s telecommunication scene with a market capitalisation of RM27.3bil.

There is some speculation that Maxis could seek a merger with U Mobile Sdn Bhd, although that may all depend on the price tag of the latter.

Ananda’s stake in Maxis could also be acquired by other parties, who may have other growth plans for the telco.

Meanwhile, Bumi Armada is exploring a prospective merger with MISC Bhd’s offshore business, although an analysis of the deal reveals that it is likely to be less beneficial to MISC considering its much bigger market cap, stronger balance sheet, and backing from parent company Petroliam Nasional Bhd.

As for Astro, its share price is a far cry from its previous levels.

Nevertheless, there has been speculation for some time now of a merger between Astro and Maxis.

The rationale is that this consolidation could create a strong entity to better cater to changing consumer behaviour and the growing availability of alternative digital content.

Yet another possibility is that stakes in these companies could be gradually divested by the family trusts that are said to have been created, which are believed to now own some of these assets.

This approach would mirror the way the Teh family is dealing with the assets of the late Tan Sri Teh Hong Piow of Public Bank Bhd.