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Malaysia's Maxis eyes $3.4 bln in IPO

KUALA LUMPUR/SINGAPORE (Reuters) - Maxis Bhd, Malaysia’s biggest mobile operator, is set to raise as much as $3.4 billion in Southeast Asia’s biggest initial public offering, after strong demand helped it tighten an indicative price range.

The IPO bucks a faltering market across India, China and Australia, where the primary equity window that saw a big revival two quarters ago is beginning to quickly shut.

The listing comes just two years after Maxis was taken private by reclusive Malaysian billionaire owner, Ananda Krishnan, who owns telecom assets in India and Indonesia.

Maxis is seeking to price the shares between 5.00 to 5.20 ringgit a share ($1.48-$1.54) versus the previous range of 4.80-5.50 ringgit ($1.42-$1.63), sources familiar with the deal told Reuters on Monday.

This means the IPO could raise between 11.25 billion-11.7 billion ringgit ($3.3 billion-$3.4 billion) for its parent, which is selling 30 percent of its existing share capital to reduce debt and finance operations in India and Indonesia.

Maxis spokeswoman Catherine Leong declined comment and CIMB, part of the global bookrunners, was not immediately available to comment.

Maxis’ valuation, at a price to earnings multiple of 16 times on 2009 earnings, based on a share price of 5.20 ringgit, is lofty but fund managers may be inclined to own the stock due to its weight in Malaysia’s benchmark stock index, said Pankaj Kumar, chief investment officer at local insurer Kurnia Insuran.

Kurnia is bidding for Maxis shares.

The institutional book for the IPO was “well covered” at above 5.00 ringgit a share, from a previous minimum indicative price of 4.80 ringgit, the sources said.


One fund manager said: “We have bid for the shares at a price which we think makes sense on a valuation perspective, taking into consideration Maxis’ future earnings growth and at what rate Maxis will grow.”

The IPO, comprising an institutional tranche of 2.0 billion shares, more than 90 percent of the total, and a retail portion of 212 million shares, is expected to be priced on Tuesday as book-building for the institutional segment ends later on Monday.

The share offer came after Malaysian Prime Minister Najib Razak asked Maxis to re-list to boost liquidity and draw in investors in the market.

The listed firm will be a stripped down version as it will house just the Malaysian business, leaving the fast-growing Indian and Indonesian operations with its unlisted parent Maxis Communications Bhd.

Ananda, ranked by Forbes magazine earlier this year as Southeast Asia and Malaysia’s second richest man with assets totalling $7 billion, owns a 45-percent stake in Maxis Communications while Saudi Telecom own a 25-percent stake. The rest is led by domestic funds in Malaysia.

CIMB, Credit Suisse and Goldman Sachs are joint bookrunners for the IPO, while JP Morgan, Nomura, and UBS are co-bookrunners.

CIMB, Malaysia’s second-biggest lender and the country’s top deal maker, had been the advisor for Maxis’ listing in 2002 and its privatisation in 2007.

Nazir, 42, is the younger brother of Malaysia’s Prime Minister Najib and was also involved in all three deals.

Maxis, with revenue of $2.5 billion in 2008, is expected to list on Nov. 19.

Editing by Anshuman Daga