At an extraordinary general meeting on Thursday (26 May), 42.17% of Axiata Group’s shareholders – including Permodalan Nasional – voted against the proposed acquisition of a 66.03% stake in Indonesian telco Link Net for IDR8.72 trillion (USD610 million), The Edge reports. Whilst the resolution carried with 57.83% of votes in favour, the significant number of dissenting voters is a cause for concern if the acquisition is to go ahead. The online news portal notes that Employees Provident Fund (EPF) and Amanah Saham Nasional (ASNB) are thought to be among those blocking the deal, with unnamed sources previously reporting several concerns: ‘At a time when CAPEX is needed for acquisitions in the Philippines, [there is concern about] impact on dividends, as well as on the structure of the acquisition of both Axiata and [Axiata] XL,.’ Meanwhile Axiata group chairman Tan Sri Shahril Ridza Ridzuan told reporters that the naysayers were primarily concerned about the negative impact on its balance sheet. ‘But I think we do have the time to explain, basically, to the shareholders, that the balance sheet is manageable,’ he said.
As previously reported by CommsUpdate, in January this year Indonesian operator XL Axiata and its parent struck a deal to take a joint 66.03% stake in Link Net. Once completed, Axiata Investments will be obliged to conduct a mandatory tender offer for all Link Net’s remaining shares. The deal is being funded through a combination of internal resources and borrowings and is expected to complete in 3Q22, subject to regulatory and shareholder approval.