To sell or not to sell?

Late Friday last week, little known Pinehill Pacific Bhd (formerly known as Multi Vest Resources Bhd, which by the way was formerly known as Best World Land Bhd) surprised the market with the announcement that it was parting with nearly 9,000 acres of landbank and related plantation assets held via three subsidiary companies to United Plantations Bhd (UP) for a whopping sum of RM413.6mil.

UP is in actual fact paying approximately 10.9% premium to the total market value of the assets acquired. What was interesting is that Pinehill Pacific (PP) is a smallish plantation based company with a market capitalisation of just under RM21mil prior to the announcement and hence, the deal itself was close to 20 times its equity market value.