The Employees Provident Fund is offered about 100 million shares, or 1.3 per cent, of Maxis at RM5.20 a share, say sources
The Employees Provident Fund (EPF) may have been asked to pay RM520 million for a slice of Maxis Bhd, Malaysia's biggest mobile operator that is set to be among Southeast Asia's biggest initial public offering (IPO) this year.
Sources said the pension fund was offered about 100 million shares, or 1.3 per cent, of Maxis at RM5.20 a share.
Before the mobile operator was delisted two years ago, EPF had over 114 million shares of Maxis Communications Bhd. Maxis Communications is the parent of Maxis Bhd.
Fund managers said the book-building process is expected to be done in two methods for institutional investors.
Typically, big investors will bid for the amount of shares and the price at which they are willing to pay under the book-building. This will officially start tomorrow.
The other way is that selected institutional funds will be offered a block of shares, about 50-100 million shares, at RM5.20 each or lower.
"If the strike price is higher than RM5.20, the selected funds will be paying RM5.20. But if the strike price is below RM5.20, they will pay the lower price.
"The offer is usually given to loyal and long-term investors like EPF. Other funds will have to go through the conventional way," said a fund manager.
The strike price is the price at which the IPO is finally set, at the end of the book-building process.
Sources also revealed that five other institutional funds, two local and three foreign funds including a Middle East fund, were offered shares at a similar price.
Although the official book-building process is expected to start tomorrow, rumour has it that an investment bank has already opened its book to orders from yesterday, with the bid starting at RM4.80 a share.
CIMB Investment Bank Bhd is the principal adviser for the IPO while Credit Suisse and Goldman Sachs are joint global coordinators and book-runners.
Meanwhile, Bloomberg News reported that Malaysian funds, which included the EPF, will buy almost half of the shares on offer.
Maxis Communications has offered 2.25 billion existing shares, or 30 per cent, of Maxis Bhd under the IPO. Some 92 per cent of that have been reserved for institutional investors.
Maxis Bhd's final prospectus is expected to be out on October 28.
