Khazanah Nasional has announced its privatisation offer of MYR0.27 to buy out MAS and take it private.
MAS management is amenable to this offer, could possibly be concluded by 4Q 2014.
We advise shareholders to take up the offer which is fair; it is 8% higher than our SOP valuation of MYR0.25.
We advise shareholders to take up the offer, which we deem as fair, at an 8% premium to our SOP-based fair value of MYR0.25. We believe that market will be supportive, given that consensus was overwhelmingly negative and target price recommendations were much lower. We do not expect a revise offer; MAS‟ outlook is poor and investment case is absent over the short and medium term.
Source: Maybank Research - 11 Aug 2014
MAS management is amenable to this offer, could possibly be concluded by 4Q 2014.
We advise shareholders to take up the offer which is fair; it is 8% higher than our SOP valuation of MYR0.25.
What’s New
Khazanah Nasional‟s privatisation of MAS is official, much to everyone‟s anticipation. Khazanah has a 69.4% ownership in MAS, and will need to pay MYR1.38b for shares that it doesn‟t already own.What’s Our View
We are positive on this necessary step which has come in a swift manner. MAS requires significant restructuring and it would have been near impossible to do it in a public listed framework, in our view. Our analysis alludes that MAS' financials are very weak in their current form. With a cash burn rate of MYR5m per day, MAS could exhaust its entire free cash resources by end-2014. Therefore, this offer provides an alluring exit plan.We advise shareholders to take up the offer, which we deem as fair, at an 8% premium to our SOP-based fair value of MYR0.25. We believe that market will be supportive, given that consensus was overwhelmingly negative and target price recommendations were much lower. We do not expect a revise offer; MAS‟ outlook is poor and investment case is absent over the short and medium term.
Source: Maybank Research - 11 Aug 2014
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