Why IJM is hiving off its plantation arm

Another question is, why is KLK buying a significant plantation asset at a time when CPO prices are trading at their highest level? Would KLK risk over-paying? And why is IJM Corp selling its plantation arm? For IJM Corp, it is believed that one consideration is due to the many environmental and labour issues that seem to affect plantation companies. (File pic shows an IJM plantation)

THE offer by Kuala Lumpur Kepong Bhd (KLK) to buy out IJM Plantations Bhd (IJMP) should not come as a surprise considering that the latter had been on sale for quite a while, going by industry chatter.

Sources also say that there were competing bids for IJMP, but KLK’s offer price was said to be the highest. “There were some offers that came in prior to KLK’s offer but nothing came close to IJM Corp Bhd’s target price for its majority stake in IJMP which is even higher than what KLK is offering, ” a source says.