A MONTH after Felda Global Ventures Holdings Bhd (FGV) confirmed its interest in London-listed New Britain Palm Oil Ltd (NBPOL), two more Malaysian entities have entered the fray.
Sime Darby Bhd, a conglmerate whose plantations acreage outstrips that of FGV, has joined in the race for NBPOL, which is majority-owned by listed Kulim (M) Bhd.
Not to be left out is the Sultan of Johor, who is increasingly seeking to grow his presence in the corporate scene. Sources say Sultan Ibrahim Ismail Sultan Iskandar is teaming up with a Singapore-listed China entity to put in a bid for NBPOL.
“Interest in NBPOL is turning out to be a three-way race, involving all Malaysian parties,” says an industry source.
“While Sime Darby’s interest in the Papua New Guinea (PNG)-based company is logical given its large plantation focus, the Johor Sultan’s is surprising considering that his recent corporate involvement has been mostly property related,” the source adds.
However, some quarters are hoping that the race for a block of NBPOL would not turn into a bidding war as it involves two of Malaysia’s biggest plantation-based companies.
More interestingly, bankers indicate that valuations of NBPOL may go as high as £6 (RM26.2) per share. At the time of writing, NBPOL is traded at £4.22 (RM18.43), translating into a market cap of £633.95mil (RM2.76bil).
NBPOL is 48.97% owned by Kulim, which in turn is a subsidiary of Johor Corp (JCorp) – the asset rich but debt laden state investment arm. NBPOL was once seen as one of the prized assets of JCorp.
However, there has been talk that Kulim may look to dispose its holding in NBPOL, if the price is right. This may be to help JCorp ease its debt burden. The group had some RM8.5bil in total borrowings at end-2013. Last year Kulim failed in its bid to raise its shareholding in NBPOL by 20% to 68.97% when it was unable to undo a restraining order imposed by the PNG regulators after it launched a partial general offer for the shares at £5.50 (RM27.47) per share.
In May, StarBizWeek reported that FGV has set its sights to acquire a major stake in NBPOL. Subsequently in an announcement to Bursa Malaysia, FGV said that is looking at NBPOL as part of its growth strategy. “We have yet to initiate any formal discussions and plans are purely at a preliminary stage at this juncture,” it had said in a statement then.
It is no secret that Sime Darby is also looking to expand and strengthen position of its diversified business, including plantation. In June, it was reported that the group was looking at land bank expansion for the plantation division. “We are looking for opportunities to acquire land outside Malaysia,” executive vice-president of group strategy and business development Alan Hamzah Sendut was quoted as saying in a news report.
NBPOL is a large palm oil producer in PNG with 77,000ha of oil palm plantations in PNG and the Solomon Islands, 12 palm oil mills and one refinery each in PNG and Liverpool. The group is also the largest domestic sugar and beef producer in PNG via its over 7,700ha sugar cane plantations and 9,200ha of grazing pastures as well as a seed production and palm breeding facility.
The stock is considered the pride of PNG with West New Britain Province owning 12% of NBPOL.
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