KUALA LUMPUR (April 11): Tenaga Nasional Bhd (TNB) shares fell as much as 46 sen or 3.7% to RM12.12 so far today after major shareholder Khazanah Nasional Bhd was reported to have offered to sell TNB shares under a share placement to raise RM1.05 billion.

Bloomberg, citing terms for the deal, reported that Malaysian government investment arm Khazanah offered to sell 85 million shares in TNB at RM12.33 each, which represents a 2% discount to the stock's last closing price of RM12.58.

"Shares were offered at RM12.33 to RM12.58 each, according to earlier terms.

"Offer shares represent about 1.5% of issued share capital. Khazanah is subject to 60-day lock-up. JPMorgan and CIMB are joint bookrunners," Bloomberg reported.

At 12:30pm, TNB shares settled at RM12.14 for a market value of RM69.04 billion. The counter had fallen 10.7% year-to-date compared to the FBM KLCI's 3.7% drop.

Over the last one year, TNB's share price had declined to current levels from its highest at RM16.12, which was recorded on May 4, 2018.

On Monday (April 9, 2019), AmInvestment Bank Bhd analyst Gan Huey Ling wrote in a note that AmInvestment lowered its fair value for TNB shares to RM13.50 from RM14.55 previously after revising the government-controlled utility's terminal growth rate from 2.5% to 2%, to account for subdued long-term growth prospects.

"TNB is expected to announce its plans in respect of the National Connectivity Plan in early 2QFY19. The board of directors is still deliberating on the proposals. Hence, we do not know the capex or earnings contribution from the project for now.

"We are keeping our HOLD recommendation on TNB. Although there is a possibility that the government's energy reforms may not affect TNB significantly, we prefer to be cautious until the proposals are announced," Gan said.