EC approves Sime Darby’s RM5.6b New Britain Palm Oil buy

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KUALA LUMPUR: The European Commission (EC) has approved Sime Darby Bhd’s takeover offer for New Britain Palm Oil Ltd (NBPOL).

Sime Darby (fundamental: 1.3; valuation: 1.3) said in a filing with Bursa Malaysia yesterday that it had obtained the clearance for the European Union (EU) merger filing for the privatisation of UK and Papua New Guinea-listed NBPOL.

“The condition of the EU merger filing has now been fulfilled,” Sime Darby said, adding that the NBPOL offer had been extended until March 20 this year.

The EC said in a statement on its website that it had approved the NBPOL acquistion under EU merger regulations.

The regulator said it had approved the exercise as the NBPOL acquisition was not expected to result in competition concerns.   

“The proposed acquisition would not raise competition concerns given particularly the parties’ geographic complementarity within the EU and the presence of other suppliers of palm oil products,” the commission said.

To recap, Sime Darby in October last year, via its wholly-owned unit Sime Darby Plantation Sdn Bhd, proposed to buy the entire stake in NBPOL for £7.15 (RM39.34) a share or £1.07 billion cash.

However, Sime Darby extended the offer period as it needed to fulfill several conditions such as obtaining the EC’s declaration that the offer was compatible with the internal market.

The privatisation of NBPOL will see Sime Darby delisting NBPOL from the UK bourse.

The acquisition of NBPOL includes Kulim (M) Bhd’s 48.97% stake in NBPOL.

In December 2014, Kulim shareholders at the company’s extraordinary general meeting approved the NBPOL stake sale to Sime Darby.

Following Kulim shareholders’ approval, Sime Darby said it had secured 58.7% of NBPOL’s voting shares as at Dec 3, 2014.

This means Sime Darby had then fulfilled the condition of securing at least 51% of NBPOL’s voting rights for the takeover offer to materialise.

The EC’s consent for Sime Darby’s NBPOL purchase represented another milestone as the market anticipated that the takeover offer would become unconditional.

Sime Darby shares closed up   two sen at RM9.55 yesterday, giving it a market capitalisation of RM59.32 billion. 
 

The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.

 

This article first appeared in The Edge Financial Daily, on January 29, 2015.