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KUALA LUMPUR (December 12): Amid talks by the Federal Land Development Authority (FELDA) that it wishes to terminate the land lease agreement it has with its subsidiary FGV Holdings Bhd, which owns 33.6%, The government agency, however, announced on Monday that it is increasing its stake to more than 50% and will undertake a mandatory takeover offer for the remaining shares it does not own at RM1.30 a share.
FELDA said it will acquire a 13.88% stake in FGV from two state-linked agencies – Retirement Fund (Incorporated) (KWAP) and investment holding Urusharta Jamaah Sdn Bhd – for RM658 million in cash, increasing its stake in the giant. of agribusiness to more than 50%.
It is unclear if FELDA intends to maintain FGV listing status and has secured funds for the proposal.
Only in October, Perspective Lane (M) Sdn Bhd (PLSB) of magnate Tan Sri Syed Mokhtar Albukhary expressed interest in participating in FGV by injecting plantation assets in exchange for shares. The plan was for PLSB to inject Tradewinds Plantation Bhd for a controlling block of shares in FGV, but some sources familiar with the details of the asset injection questioned its valuation of Tradewinds Plantation.
Will Syed Mokhtar fight for FGV?
What is FELDA’s game plan for FGV?
In the nearly eight years that FGV has been publicly traded, its share price has fallen from its issue price of RM4.55 at its initial public offering (IPO) to RM1.19 yesterday, a drop of 73.85%.
But with FGV trading at RM1.19, the RM1.30 offer is still a 9% premium and reason enough for minorities to leave the pool, analysts said.
However, they could not enjoy any benefit from the group’s improved operations.
In this week’s cover story, The edge Malaysia Take a look at the questions arising from the FELDA plan and FGV’s controversial past deals.
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