London, Kuala Lumpur, Singapore: Saudi Telecom Co. is exploring options for its indirect stake in billionaire T. Ananda Krishnan’s Maxis Bhd., the second-largest Malaysian wireless carrier by market value, people with knowledge of the matter said.
Krishnan is Malaysia’s fourth-richest person, with a net worth of $5.5 billion, according to the Bloomberg Billionaires Index.
The Gulf kingdom’s biggest telecommunications operator is gauging interest in its 25 per cent holding in Binariang GSM Sdn., which is the controlling shareholder of Maxis, according to the people. The Riyadh-based company may consider selling the stake to a Malaysian pension fund or another financial investor, two of the people said, asking not to be identified because the information is private.
The Binariang holding gives Saudi Telecom an effective 16.2 per cent interest in Maxis valued at about $1.8 billion, data compiled by Bloomberg show. Binariang also owns a majority stake in Indian wireless carrier Aircel Ltd., which is merging with larger rival Reliance Communications Ltd.
Saudi Telecom hasn’t started a formal auction process for its Binariang stake and could decide to keep it, according to the people. Maxis gained 2.2 per cent, the most in about two months, to 6.15 ringgit at the close Monday in Kuala Lumpur, after earlier rising as much as 3.3 per cent. Saudi Telecom fell 2.9 per cent to 54.75 riyals at 1:31pm in Riyadh, headed for the lowest close since December 2013.
“The market believes that the entrance of a new partner may be good for Maxis,” Danny Wong Teck Meng, chief executive officer at Areca Capital Sdn., said by phone Monday from Kuala Lumpur.
Saudi Telecom joined Middle Eastern operators including Ooredoo QSC and Emirates Telecommunications Group Co. that ploughed more than $10 billion into a wave of Asian acquisitions from 2005 to 2010, data compiled by Bloomberg show. Ooredoo is now considering divesting its indirect holding in Singapore’s StarHub Ltd., people familiar with the matter said earlier.
A representative for Saudi Telecom declined to comment. A spokesman for Maxis didn’t immediately respond to an email and phone call seeking comment.
Saudi Telecom said in July it’s working with domestic competitor Etihad Etisalat Co. to explore options for their tower networks. The two companies aim to enhance value from their infrastructure assets by reducing capital and operational spending on the towers, they said at the time.