[ad_1]
KUALA LUMPUR (March 15): The Federal Land Development Authority (Felda) has failed in its offer to privatize FGV Holdings Bhd at RM1.30 per share.
This raises the question of what Felda’s alternative plan is, as he could not fully own the plantation group.
Felda only obtained an 81% stake in the plantation group’s capital stock, as the offering closed at 5pm on Monday, according to a document filed with Bursa Malaysia.
Felda was required to obtain 90% of the shares it did not own upon acceptance of its takeover bid to trigger a mandatory share acquisition and take over the publicly traded company.
This means that the authority must have the acceptance of shareholders who together own 1,626 million shares of FGV and that will translate into a 95% stake, or approximately 3.46 million shares in the plantation giant.
At the presentation, FGV said that Felda, along with the people performing in concert, had 2,955 million shares representing an 80.99% stake in FGV as of 5pm today. Felda also received 455,800 shares or 0.1% of the shareholders who accepted the takeover bid.
Following the failed attempt, Felda will now have to meet the minimum requirement on the public stake spread in FGV. Bursa Malaysia requires a 25% public stake differential, compared to FGV’s 19% currently.
Felda’s takeover offer values FGV at RM4.74 billion or RM1.30 per share, a 71.43% discount to its 2012 initial public offering price of RM4.55 per share.
The offer, which was first announced on December 7, 2020 and became unconditional on December 23, saw its deadline postponed three times from the original February 2 to March 15.
Felda’s attempt to take over FGV came on the heels of Felda’s plans to terminate its land lease agreement (LLA) with the latter. Under the LLA, FGV leases 350,000ha of plantation land for RM248 million per year plus a 15% profit for a period of 99 years. The completion could cost Felda around RM4 billion, according to analysts.
The lower-than-expected profit made by Felda from the LLA was one of several issues the government tried to address at the agency, following a review by a special task force last year.
What’s next for FGV?
The chill Felda received from FGV minorities is seen as an indication that the offer price of RM1.30 per share was not that attractive, especially against strong crude palm oil prices. Three-month futures exceeded RM4,000 to RM4,138 on Monday.
Looks like Felda is going back to the drawing board. Will the termination of LLA materialize? If so, will FGV be compensated accordingly?
More importantly, FGV’s renewal appears to have been interrupted by the privatization exercise, some analysts said. It would be crucial to know what Felda has in store to rejuvenate the plantation group.
Furthermore, the investment vehicle of the magnate Tan Sri Syed Mokhtar Albukhary, Perspective Land (M) Sdn Bhd, had expressed interest in injecting assets into FGV through a share swap exercise.
However, FGV said on March 8 that it was not going ahead with the offer, in light of Felda’s takeover bid.
Adding a new twist to the myriad of events at FGV, MSM Malaysia Holdings Bhd’s strong share price rally has fueled speculation about a major corporate exercise brewing at the sugar refinery, in which FGV controls a 51% stake, while Felda owns 9.43. % to bet.
Read also:
Felda acquires more FGV shares as the takeover bid period ends
[ad_2]
