KUALA LUMPUR, June 5 — Billionaire T. Ananda Krishnan is weighing the possibility of taking Astro Malaysia Holdings Bhd private after shares of the pay-TV operator dropped to a record low, people familiar with the matter said.
The tycoon has revived deliberations about a buyout of Kuala Lumpur-based Astro, which had a market value of US$1.9 billion (RM7.5 billion) at yesterday’s close, according to the people. Krishnan has been speaking to potential advisers about funding options and is reaching out to some major investors to gauge their interest, the people said, asking not to be identified because the information is private.
Astro shares jumped as much as 16 per cent in Kuala Lumpur trading today, the most intraday in nearly two months. The company’s stock had fallen 46 per cent this year through yesterday, making it the worst performer on the benchmark FTSE Bursa Malaysia KLCI Index, which was down 2.3 per cent.
“It’s an opportunistic move from Krishnan,” Justin Tang, head of Asian research at United First Partners, a special situations investment and advisory firm, said by phone. “He would need to offer at least a 25 per cent premium for people to consider his buyout offer.”
Krishnan is Malaysia’s fourth-richest person with a net worth of about US$4.9 billion, according to the Bloomberg Billionaires Index. The tycoon controls a 40.9 per cent stake in Astro as of April 10, the company’s latest annual report shows. Malaysian sovereign wealth fund Khazanah Nasional Bhd. owns 20.7 per cent, while state-owned pension fund Employees Provident Fund holds 7.8 per cent.
Astro’s satellite-television platform offers 189 channels to its more than five million customers, reaching over 70 per cent of Malaysian households, according to its website. The discussions are at an early stage, and there’s no certainty that Krishnan will proceed with a take-private bid, the people said.
Relisting businesses
A representative for Krishnan’s private investment vehicle, Usaha Tegas Sdn., didn’t immediately answer a phone call and email seeking comment. A spokeswoman for Astro said she couldn’t immediately comment.
Krishnan is known for buying out minority investors in his listed companies when their stock is slumping, only to bring them back to market at higher valuations later. Astro, then known as Astro All Asia Networks Plc, completed an initial public offering in 2003 and was taken private by Krishnan in 2010. Its domestic operations were relisted just over two years later, with the overseas businesses remaining in private hands.
The tycoon has pursued similar tactics with wireless carrier Maxis Bhd. and oil services provider Bumi Armada Bhd. He took Maxis’s parent company private in 2007, then relisted its Malaysian business through a 2009 IPO that raised US$3.3 billion, according to data compiled by Bloomberg. The tycoon bought out Bumi Armada’s other investors in 2003, restructured the company and sold US$882 million of stock to the public again in 2011, the data show.
Speculation that Krishnan may buy out Astro previously surfaced in 2016. The company told the Malaysian stock exchange in November that year that it hadn’t received any confirmed proposal from its major shareholders. — Bloomberg
