PT Agro Muko oil palm plantation in Indonesia
KUALA LUMPUR: Kuala Lumpur Kepong Bhd
’s (KLK) £415.4mil (RM2.3bil) takeover offer to acquire shares of London-listed plantation firm MP Evans Group PLC has lapsed with KLK failing to get the required 50% acceptance level.
In a statement on Wednesday, KLK said its unit KL-Kepong International Ltd (KLKI) just managed to secure valid acceptances that represented 13.2% of MP Evans’ existing issued capital as at the latest closing date, 1pm on Dec 21 (London time).
KLK, one of the country’s largest plantation players, had extended the acceptances deadline from the first closing date of Dec 9. However, it did not revise the offer price of 740 pence per share.
As of Dec 9, it had only received valid acceptances amounting to 12.9% equity interest. Even with the extension, the level of acceptances barely moved.
The offer had been conditional on the KLK group’s receiving valid acceptances, together with MP Evans shares acquired or agreed to be acquired, that carried a total of more than 50% voting rights in MP Evans.
“As this acceptance condition has not been satisfied, the offer has lapsed with immediate effect and accordingly, the offer is no longer capable of further acceptance... (by) MP Evans shareholders; and KLK and KLKI have ceased to be bound by such acceptances,” KLK said.
KLK had initially approached MP Evans’ board with an offer price of 640 pence but later sweetened the offer to 740 pence, a 74% premium to MP Evans’ closing price on Oct 24 (the last business day before the offer period began).
KLK then said the increased offer was final and “not capable of being increased”.
Nonetheless, MP Evans’ board opposed the revised offer as well, saying that it “very substantially undervalues the company.” The board “strongly” urged MP Evans shareholders not to sell their shares to KLK.
The MP Evans group, listed on London’s Alternative Investment Market, has a majority interest in 21,600 planted hectares and a minority interest in 22,000 planted hectares of oil palm plantations in Indonesia.
KLK had seen strategic merit in synergising the operations of MP Evans with KLK’s from a geographical and capabilities perspective.
In a statement on Thursday, MP Evans board said it welcomed the rejection by shareholders of the offer, which it believes very substantially undervalued MP Evans’ shares.
MP Evans chairman Peter Hadsley-Chaplin said: “MP Evans owns, and manages, an excellent portfolio of plantations and has a clear strategy for growing the business significantly further, both by acquisition and by the development of its existing plantable areas.
“The successful growth to date has led to the board’s recently stated intention to increase dividends substantially. The board thanks our shareholders for their support and for their belief in the continuing successful execution of our growth strategy.”
MP Evans shares plunged 27%, or 180 pence, to close at 490 pence on Wednesday. The company’s shares had hovered at about 430 pence but following KLK’s unsolicited offer, the price shot up to as high as 700 pence.
Meanwhile, KLK shares closed 14 sen lower at RM23.66 on Wednesday.
