KUALA LUMPUR, Jan 28 — MIDF Amanah Investment Bank Bhd (MIDF Research) has maintained a ‘buy’ recommendation with unchanged target price of RM5.29 for Axiata Group Bhd on the back of a joint proposition to acquire Indonesia’s PT Link Net Tbk shares.
The research house said proposed acquisition could solidify its strategic move into fixed broadband and strengthen the presence of Axiata and its subsidiaries group in Indonesia.
Yesterday, Axiata Group and PT XL Axiata Tbk inked a conditional share purchase agreement (SPA) to jointly acquire 66.03 per cent equity interest and carry out a mandatory tender offer (MTO) for the remaining 33.97 per cent of PT Link Net Tbk shares for a total purchase sum of RM3.86 billion for a 100 per cent stake.
“Coupled with XL Axiata’s enterprise offerings including mobile connections, Link Net will be well-positioned to monetise on the growing enterprise market.
“Moreover, Axiata will benefit from Link Net’s strong cash flow profile and consistent dividend payouts,” it said in a note today.
Furthermore, it said Axiata could also establish its position as one of the leading digital players in the region, with increased exposure to high average revenue per user customers, as well as the higher potential and faster growing fixed broadband market.
“We are positive on the move since the proposed acquisition is strategic and will solidify Axiata’s position in Indonesia,” it said.
MIDF Research believed it strengthen Axiata Group’s position in Indonesia as Link Net’s fixed broadband business complements XL’s mobile business, and both companies could enhance their services via fixed-mobile converged proposition for consumer and enterprise customers with growing population of Indonesia users.
The proposed acquisition and proposed MTO are expected to be completed in the third quarter of 2022.
At 11am, Axiata Group’s share price rose eight sen to RM3.74 with 324,300 shares traded. — Bernama
