Published June 3, 2009

Maxis denies talks of merger with Astro

OSK Research report says that officials had been pitching relisting exercise

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(KUALA LUMPUR) Maxis Communications Bhd, a mobile phone operator taken private by its owners in mid-2007, has shot down market talk that it is eyeing a relisting through Astro All Asia Networks plc, reports Malaysia's Business Times.

Both Maxis and Astro, a pay-TV operator, are controlled by billionaire businessman T Ananda Krishnan.

'Maxis is not aware of any such proposal,' it told MBT. It issued the denial after OSK Research highlighted in a report speculation that a major corporate exercise was brewing at the highest level in Astro.

'Although details are sketchy, we gather that a plan is being mooted to inject Maxis into Astro. We understand from a source that Maxis officials and representatives had been pitching for the relisting exercise to a select group of individual investors overseas over the past two months,' OSK analyst Jeffrey Tan said in the report on Monday.

Such a plan is not implausible given the strong paternal links of both companies, he said.

It was speculated that Astro might make an announcement relating to this at the Invest Malaysia conference later this month.

Maxis, however, said that it considered the suggestions contained in the OSK report to be 'totally without basis' and 'speculative'.

The stock, which has long been dogged by talk of a potential privatisation, has been generally rising since hitting an all-time low of RM1.80 in mid-March.

Astro, when contacted about the report, said that it 'does not comment on market speculation or reports on specific opportunities'.

Maxis, once the darling of telecoms investors, said when it was delisted in 2007 that it would consider a relisting when earnings were more stable over the next three to five years.

Should Maxis merge with Astro, the combined entity would be the largest listed telecoms 'quadruple play' exposure in the country with a mobile and pay-TV subscriber base exceeding 11 million and 2.6 million respectively, Mr Tan noted.

This would pit it against Singapore's StarHub and SingTel, which have both embraced the quadruple-play strategy combining cellular, broadband, fixed-line and pay-TV businesses.

OSK maintained a 'trading buy' call on Astro, with a target price of RM3.50.