Quick take: FGV jumps 17% after failed privatisation by Felda

KUALA LUMPUR: Shares in FGV Holdings Bhd jumped over 17% in early trade Tuesday after the Federal Land Development Authority (Felda) failed in its bid to take FGV private at RM1.30 per share.

The planter, one of the top gainers on Bursa Malaysia, surged 17.69%, or 23 sen to RM1.53 with 12.6 million shares done.

According to a filing with Bursa Malaysia, Felda only obtained 81% equity, or 2.955 billion shares interest in FGV as the offer closed at 5pm on Monday.

Felda was required to obtain 90% of the shares it did not own from the acceptance of its takeover offer in order to trigger a compulsory share acquisition and to take the listed company private.

Felda extended the closing date for the acceptance of the takeover offer for the third and final time last month to March 15. The original deadline was Feb 2, before it was postponed to Feb 16, and subsequently to March 2.

MIDF Research noted that the current shares obtained were not enough as Felda is required to obtain 90% of the shares, hence this led to an unsuccessful attempt on FGV privatisation.

“We think that one of the factors that contributed to the unsuccessful attempt to take over FGV was the unattractive offer price of RM1.30.

“With the current price of CPO price which has breached RM4,000 a tonne, which is also at an all-time high, minority shareholders might have been seeking for a higher valuation,” MIDF said.

The research house maintained its earnings estimates for FY21 and FY22 unchanged at RM323.4mil and RM361.3mil respectively.

“We are maintaining our target price of RM1.31. This is based on pegging FY21 BVPS of RM1.31to an unchangedPBV of 1.0x which is around the group’s 5-year historical average,” MIDF said.

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FGV , Felda , privatisation , takeover , CPO


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