MIDF Amanah Investment Bank Bhd has urged shareholders of FGV Holdings Bhd to accept the Federal Land Development Authority’s (Felda) RM1.30 per share takeover offer, which would pave the way for FGV’s delisting from Bursa Malaysia.
In a note released today, MIDF stated: “The RM1.30 offer price represents a 12 per cent premium over its fair value estimate of RM1.16.”
“Notably, Felda and its persons acting in concert (PACs) collectively hold approximately 86.93 per cent of FGV’s total issued shares. The offer, priced at RM1.30 per share – similar to the bid made in 2020 – aims to raise their stake to at least 90 per cent, which would allow Felda to delist FGV,” it added.
MIDF highlighted that FGV is currently trading at a price-to-earnings ratio (PER) of 16.7 times based on forecast financial year 2025 earnings per share of 7.6 sen – about 8.6 per cent below the integrated plantation sector’s average PER of 18.3 times.
“If valuation were instead based on FY2024 earnings, the implied PER would be 17.2 times. Although the historical and forward implied PERs are notably below FGV’s five-year average of 21.7 times and lag behind sector valuations, we view this as a fair benchmark given the company’s mixed outlook,” the note said.
The investment bank emphasised that the takeover reflects Felda’s continued push to fully privatise FGV and strengthen strategic control.
“Felda has clearly stated that it does not intend to maintain FGV’s listing status upon completion of the offer. Should Felda and its PACs reach the 90 per cent ownership threshold, Bursa Malaysia will suspend trading of FGV shares within five market days, after which the delisting process will be initiated as per Bursa’s listing requirements,” MIDF said.
“If successful, the privatisation is expected to streamline Felda’s operational oversight, align FGV’s strategic direction with broader national interests, and potentially unlock long-term value through improved efficiency and coordination across the group,” it concluded. - May 27, 2025
