Ananda Krishnan's plans to sell a stake in satellite operator MEASAT Global Bhd
Malaysian tycoon Ananda Krishnan's plans to sell a stake in satellite operator MEASAT Global Bhd to Saudi-based Arabsat has stalled over differences on valuation, sources familiar with the matter said.
Krishnan, Malaysia's second richest man, has been looking to sell a stake in MEASAT for several months, but that deal was overshadowed by his plans to offload US$3bn worth of power assets in a bid to shed risky operations.
Initial plans had been for a sale of the entire satellite firm, which operates regional satellite networks and was taken private by Ananda in 2010. A sale of the entire firm may fetch about US$500m.
"MEASAT is looking for a partial exit," one of the sources said, speaking on condition of anonymity.
Morgan Stanley is advising MEASAT on the sale or merger with another satellite firm, according to three banking sources aware of the matter.
JP Morgan Chase is advising Saudi Arabia-based Arabsat, which is owned by the 21 member states of the Arab League and is the main satellite operator in the Gulf Arab region.
French satellite operator Eutelsat has also been in the running, a second source said.
The sources were not aware if Eutelsat had picked an advisor for the sale.
"Eutelsat has no comment on the speculation around MEASAT," a Eutelsat spokeswoman said.
MEASAT, Morgan Stanley and JP Morgan declined to comment. Arabsat officials in Riyadh were not immediately available for comment.
Harvard-educated Ananda started MEASAT in the early 1990s as part of then-prime minister Mahathir Mohammad's plan to boost the southeast Asian country's communications infrastructure and attain developed-nation status by 2020.
The firm is a premium supplier of satellite communication services to leading international broadcasters, direct-to-home platforms and telecom operators, providing satellite services to 145 countries.
Arabsat carries over 400 TV channels and 160 radio stations in the Middle East, Africa, Europe, Central Asia.
Krishnan, reckoned by Forbes to have assets of US$9.5bn, was taking advantage of the higher risk appetite in the market to hive off riskier assets from his empire that runs from telecoms to pay-TV, analysts have said.
On Monday, sources told Reuters that Krishnan is nearing a deal to sell his $3 billion worth of power assets to government company 1Malaysia Development Berhad (1MDB).
Malaysia's Star Newspaper reported that the sale to 1Malaysia was indicated at a price range of 9.92bn ringgit (US$3.30bn) and 11.16 billion ringgit (US$3.71bn).
The billionaire has relisted companies with strong cash flows in recent years, relaunching part of his Maxis Bhd telecommunications services provider in what was Southeast Asia's biggest initial public offering in 2009. Last year, his team relisted Malaysian oil and gas services provider Bumi Armada Bhd.