KUALA LUMPUR – The Federal Land Development Authority (Felda), which owns a 21.24% stake in FGV Holdings Bhd, is increasing its stake in the company to 35.12% and proposing to take it private at RM1.30 a share.
Felda has entered into a conditional share purchase agreement with Retirement Fund Inc to buy 222 million FGV shares at RM289.2 million, or RM1.30 per unit.
In a statement today, Maybank Investment Bank Bhd said Felda has also entered into a share purchase agreement with Urusharta Jamaah Sdn Bhd to purchase 283 million FGV shares – representing a 7.78% equity interest in FGV – at RM368.8 million, or RM1.30 per share.
Upon completion of the proposed acquisition, Felda, together with the persons acting in concert (PACs) with it, will collectively hold more than 50% of FGV shares.
“Upon the conditional share purchase agreements becoming unconditional, Felda will serve the notice of mandatory offer to the FGV board of directors,” said Maybank IB.
The proposed acquisition represents an opportunity for Felda to obtain statutory control of FGV together with the PACs, in order to pursue its transformation plan and restructure Felda and its related companies to strengthen the agency’s core business in the plantation sector.
“The acquisition will enhance Felda’s ability to control the plantation land and integrated value chain of FGV and its subsidiaries,” said Maybank IB.
“This will pave the way for greater cooperation in the business activities of Felda and FGV, and provide Felda with access to high-value-added downstream activities undertaken by FGV in the plantation sector.”
The acquisition is expected to contribute positively to the future earnings of Felda and create sustainable synergies with the enlarged group, in turn allowing the agency to have a sustainable cash flow to restore its performance and sustainability.
Maybank IB is the principal adviser to Felda for the proposals. – Bernama, December 8, 2020
