PETALING JAYA: The Federal Land Development Authority (Felda) is proposing to privatise FGV Holdings Bhd, following two conditional share purchase agreements (CSPA) it inked with Kumpulan Wang Persaraan (Diperbadankan) (KWAP) and Urusharta Jamaah Sdn Bhd to buy their holdings in FGV for RM1.30 a share.
Felda will be acquiring KWAP’s 6.1% stake for RM289.2 million, and Urusharta Jamaah’s 7.78% stake for RM368.8 million cash, as part of its transformation plan to make Felda financially independent and sustainable.
The offer price marks a premium of 2.36% or three sen from FGV’s last traded price of RM1.27. The group’s shares were suspended from trading today pending this announcement.
Currently, Felda holds 21.24% in FGV, and upon the completion of the proposed acquisition, it (along with the parties acting in concert) will collectively hold more than 50%, thereby triggering the need to extend a mandatory offer.
“Upon the CSPAs becoming unconditional, Felda will serve the notice of mandatory offer to FGV’s board. For clarity, the proposals will not result in a mandatory offer by Felda to acquire all the remaining voting shares in MSM Malaysia Holdingd Bhd not held by FGV,” Felda said in a press notice.
In explaining its rationale, Felda said part of its transformation plan potentially involves terminating the land lease agreement with FGV and taking over the related palm oil mills subject to satisfactory discussions with FGV. Concurrently, the proposals were also considered and based on the advice from financial and legal advisers, the proposals represent the most efficient and effective approach for Felda.
“The proposed acquisition will enhance Felda’s ability to control the plantation land and integrated value-chain of FGV and its subsidiaries, which will pave the way for greater cooperation in the business activities of Felda and FGV Group, and provide Felda access to high value-added downstream activities undertaken by FGV Group in the plantation sector.”
It said through the increase in operational and financial efficiencies by streamlining the entire value chain of upstream and downstream operations in the plantation sector, respectively held by Felda and FGV Group, the proposed acquisition is expected to contribute positively to the future earnings of Felda and create sustainable synergies within the enlarged Felda group.
Maybank is the principal adviser to Felda for the proposals.
