Malaysia tycoon to buy out telco Maxis

KUALA LUMPUR (Reuters) - Malaysian tycoon Ananda Krishnan plans to buy out the country's largest mobile operator, Maxis Communications (MXSC.KL), the firm said on Monday, in a deal that could be worth at least $5 billion.

Maxis gave no reason for the buyout plan but industry analysts speculated that Krishnan, the country's second richest man after Robert Kuok, might want to relist Maxis offshore and raise foreign capital to fund international expansion.

Maxis, which faces a price war and a maturing market at home, is expanding into larger and less developed Asian markets like Indonesia and India to drive growth.

"It is a surprise move," said Cheah King Yoong, head of investment research at Malaysia's SJ Securities. "But I would not be surprised if Maxis is listed overseas."

Chong Tjen San, a telecoms analyst at Malaysia's Aseambankers, said the buyout plan could be a first step toward raising money to fund major investments in India and Indonesia.

"The privatisation of Maxis could allow Ananda Krishnan to more freely utilise his own wealth should the two overseas ventures require more capital than what Maxis' balance sheet could comfortably allow in the short term," Chong said.

Krishnan-controlled firm Usaha Tegas Sdn Bhd, a major shareholder in Maxis, has notified the company that it and its affiliates will make an offer by Thursday, Maxis said.

Krishnan held an indirect interest of 47.05 percent in Maxis as of April last year, according to company data. At the current share price, a buyout bid for the remainder of about 53 percent would cost around 17.4 billion ringgit ($5.1 billion).

It would be the largest deal unveiled in Malaysia since three plantations firms signed an $8.9 billion merger in January.

Usaha Tegas "has indicated that, barring unforeseen circumstances, the notice of takeover offer will be served on the company on or before 3 May 2007", Maxis said in a brief satement.

Maxis owns India's Aircel and Indonesia's PT Natrindo Telepon Selular, both unlisted. It has said it plans to spend $450 million this year on its Indian operations.

A local fund manager said he expected Krishnan to offer no more than 10 percent premium over Maxis' last traded price of 13 ringgit for the remaining shares.

"The stock is trading around its fair value, so I don't think there will be a big premium in the (offer) price," he said.

Maxis stock, which was suspended from trade before the company statement, has climbed nearly 50 percent in the past 12 months, outperforming the wider market by about 7 percent.

Krishnan, a former oil trader, also controls Malaysian pay-TV operator Astro All-Asia Networks Plc (AAAN.KL) and gambling and leisure firm Tanjong Plc (TJPL.KL).

Shares in Astro jumped on speculation that it, too, could be bought out by Krishnan, dealers said. Astro shares were up 6.3 percent at 5.10 ringgit by 0321 GMT. Tanjong also jumped in early trade but fell back to stand at 17.00 ringgit, down 1.2 percent.

(Additional reporting by Mark Bendeich)