Saturday, September 19, 2009

Would You Want To Invest In Maxis Re-Listing

Sigh! It has happened. Sigh!

On the Edge Financial Daily,
Maxis to offer 2.25b shares under IPO

  • KUALA LUMPUR: Maxis Communications Bhd (MCB) plans to list its Malaysian operations Maxis Bhd (Maxis), under an initial public offering (IPO) which will involve 2.25 billion shares, of which 2.075 billion will be offered to institutions and the remaining 174.79 million shares for the public and its customers.

    The IPO is set to be the country's biggest since 1995 and estimated by sources at US$2 billion, as investors rush to capitalise on booming stock markets, according to Reuters.

    Currently, MCB is the beneficial owner of 7.5 billion shares, representing 100% of the paid-up of Maxis. It is the promoter of the listing exercise and selling shareholder.

    MCB said in its exposure draft posted on the Securities Commission website on Sept 18 that it will hold 5.25 billion shares, representing 70% of the paid-up of Maxis after the IPO .............................

A US$2 Billion IPO!!!

From a minority investor or rather 'prospective' investor point of view.

  1. MCB to hold 70% of the paid-up of Maxis after listing.
  2. 2.25 billion share will be sold. 2.075 billion offered to funds and the remaining 174.79 million to minorities...

Regarding point no.2.

2.075 out of 2.25 billion for institutional funds of 92.2% will be sold to funds. The rest only for minority shareholders.

MCB will hold 5.25 billion shares after listing. Add in the the 2.25 billion shares for listing. Total shares will be 7.5 Billion! And only 174.79 million is sold to minority shareholders. That's around 2.3%!!!

Which means after listing, MCB holds 70% and the institutional funds hold 27.7%.

We the minorities will only hold 2.3%!

Rather lopsided isn't it?

Does the minority shareholders even matter?

And with such lopsided equity holding, what's there to stop another future privatisation exercise from happening again?

Will you even bother to be an investor in Maxis?