Malaysia Airports Holdings has raised $298.6 million in a block trade and will use the proceeds to acquire a 40% stake in Istanbul's second-biggest international airport.
The Sepang-based airport operator put 124 million primary shares on offer, a mix of existing and enlarged share capital.
The final offer priced at 7.90 ringgit ($2.40) a share on Tuesday, a 5.7% discount to the March 3 closing price of 8.38 ringgit. Shares were initially offered at between 7.70 ringgit and 8.10 ringgit ($2.35 to $2.47), representing a discount of between 3.3% and 8.1%. The company has a market cap of $3.2 billion.
Shares in Malaysia Airports fell 2% on March 4 and are down 7% so far this year.
Specialist funds focused on regional infrastructure and global pension funds were among the investors, said a banker close to the deal, who added that about 60 accounts participated in the accelerated bookbuild.
“Malaysia [Airports] closed in the middle of the price range with a lot of international investors,” the banker told FinanceAsia. “When we launched the deal we already had a good shadow book. We were quite pleased about the demand. There were quite a few specialist infrastructure funds and pension funds with long-term investment [aims]. Obviously there were quite a few local funds as well but we were surprised by how strong the international response was.”
There are a number of reasons why the airport operator is appealing, the banker said. Malaysia Airports – which owns the majority of the country’s airports, including Kuala Lumpur International Airport, one of the most technologically advanced airports in the world – has a stronghold in one of the busiest hubs in Southeast Asia.
It also stands to benefit from the anticipated growth of budget airlines in Asia, which remain underdeveloped compared with Europe and promise to support small business growth in the region.
“[Malaysia Airports Holdings is located in] one of the largest hubs in Southeast Asia, so geographically it’s good. But you also have the budget airline [story], which investors like,” the banker said.
Now the company appears to have even greater aspirations. According to the term sheet, Malaysia Airports plans to use the proceeds to purchase a 40% stake in Istanbul Sabiha Gokcen Airport from India’s GMR Group. Should the proposed acquisitions not be approved, the company will use the money raised for working capital.
Malaysia Airports listed on the Bursa Malaysia Securities Berhad in 1999, becoming the first airport operator in Asia to list on a stock exchange. The company owns five international gateways, 16 domestic airports, and 18 short take-off and landing ports, which serve rural Malaysia, according to the company’s website.
Malaysia’s Khazanah Nasional is an investor in Malaysia Airports Holdings.
Credit Suisse, CIMB and JP Morgan acted as joint bookrunners.
