* Listing to push Malaysia to top of Asia IPO league for
2012 - Nazir Razak
* More than 20 cornerstone investors to take 62 percent of
* Indicative price range for bookbuilding 2.67-2.85 ringgit
* Khazanah's investment jumps more than 80 pct with the
* Pay TV operator Astro hires CS, Goldman & JPM for $1 bln
By Yantoultra Ngui and Anuradha Raghu
KUALA LUMPUR, July 3 Malaysia launched on
Tuesday the $2 billion initial public offering of state-backed
hospital operator IHH Healthcare Bhd, marking the third biggest
listing of the year globally and cementing its status as Asia's
top IPO destination for 2012.
The sale of shares in IHH follows the $3 billion listing on
the Malaysian bourse last week of palm oil firm Felda Global
Ventures Holding, which was the world's biggest IPO of
the year after Facebook Inc.
IPOs in Malaysia, where the equity market is dominated by
local investors and a large domestic pension fund system, have
defied a trend in financial markets such as Singapore, where
motor racing firm Formula One decided to postpone its near $3
Adding to the flurry of IPO activity in Kuala Lumpur, three
sources with direct knowledge of the deal said pay TV operation
Astro All Asia had hired Credit Suisse, Goldman Sachs
and JPMorgan to advise on a $1 billion float.
The IHH IPO prospectus was launched at an event in the
Malaysian capital, continuing Prime Minister Najib Razak's drive
to monetise state-linked assets and boost the economic feel-good
factor ahead of a general election due by next March.
CIMB Group Chief Executive Nazir Razak, brother of the prime
minister and head of the investment bank that is lead global
co-ordinator of the listing, said IHH's market value of 22.9
billion ringgit ($7.24 billion) based on an indicative price of
2.85 ringgit per share would place it second behind HCA Holdings
- the world's largest listed healthcare provider.
"Malaysia looks set to be Asia's top IPO market this year, a
testament to both the quality of companies being listed and the
resilience of the Malaysian equity market," Nazir told
Sovereign wealth fund the Kuwait Investment Authority, asset
manager Blackrock and 20 other big "cornerstone" investors have
committed to buy nearly two-thirds of the IHH shares on offer.
Astro All Asia, owned by tycoon Ananda Krishnan, will become
the third biggest Malaysian IPO of the year under its plan to
re-list by end-September, sources told Reuters.
The firm, which had already hired CIMB and Maybank
, would have a market capitalisation of $4.7 billion.
But some investors warned Malaysia's top dog IPO status was
unlikely to last long.
"Malaysia is now the largest IPO market in Asia and surely
that is not sustainable," said Abdul Jalil Abdul Rasheed, chief
executive officer of Aberdeen Islamic Asset Management Sdn in
"I think it's just that Malaysia is probably having some
time in the sun now that other markets are quite weak."
IHH, the healthcare arm of Malaysia's state investor
Khazanah Nasional, is one of the few available plays on the
healthcare sector in the region, where rising incomes are
stimulating demand for better services.
With its dual listing in Singapore, IHH joins the likes of
Kuala Lumpur-listed KPJ Healthcare Bhd, Singapore's
Raffles Medical Group, Bangkok Dusit Medical Services
and India's Fortis Healthcare.
IHH, which counts Japan's Mitsui & Co and
Dubai-based Albraaj Capital as shareholders along with Khazanah,
embarked on an aggressive overseas shopping spree in recent
It added Turkish hospital group Acibadem AS,
Singapore's Parkway Holdings and India's Apollo Hospitals
Enterprise Ltd to its local holdings Pantai Hospitals
and International Medical University.
Khazanah Managing Director Azman Mokhtar said the listing
would value its stake in IHH at 11 billion ringgit, an 83
percent jump from its equivalent investment cost of some 6
"The listing will help to underpin the various governments'
sectoral and economic ambitions," said Azman in an earlier
speech to investors at the launch.
"This includes healthcare as one of the key sectors in
Malaysia, promotion of Singapore as a regional and global
healthcare hub and Turkey and India as significant and vibrant
domestic and medical tourism destinations."
IHH has made no mention of plans to use the IPO proceeds for
further acquisitions. It said in its draft Singapore prospectus
it would use 4.66 billion ringgit ($1.5 billion) to pay down
debt, saving some 120 million ringgit ($37.8 million) in
Total debt stood at around $2.4 billion as of the end of
BETTER THAN FELDA GLOBAL
A strong domestic market could see IHH make a stronger
trading debut than Felda Global's 20 percent first day pop when
the firm lists on July 25, due in part to its defensive appeal,
local investors say.
"IHH offers less to the public and institutional investors
(10.52 percent) than Felda (26.9 percent), how difficult is it
for it to perform the same as Felda?" said a senior official
with a Malaysian bank-backed fund management firm.
Bookbuilding was starting on Tuesday with an indicative
price range of 2.67 ringgit to 2.85 ringgit. The institutional
price and final retail price is expected to be fixed on July 12.
The 22 cornerstone investors, who also include International
Finance Corp, the private investment arm of the World Bank, will
buy 1.39 billion of the 2.23 billion shares on offer - just over
a quarter of the company - the biggest take-up by such investors
of any recent major offering in the region.
Up to 1.8 billion new shares in the IPO are on offer, while
Abraaj Capital will sell 434.7 million shares in the dual Kuala
Lumpur and Singapore listing, the draft prospectus showed.
The group posted a profit of 394.117 million ringgit in 2011
versus 574.754 million in 2010 - a drop of 31 percent on higher
Bank of America-Merrill Lynch, CIMB and
Deutsche Bank are the lead global co-ordinators, with
Credit Suisse, DBS, Goldman Sachs and Maybank
acting as joint bookrunners in the IPO.