Thursday 28 Mar 2024
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KUALA LUMPUR (Nov 15): Plantation giant Kuala Lumpur Kepong Bhd (KLK) today raised the offer price for its takeover of London-listed MP Evans Group Plc by about 16% to 740 pence (about RM39.80) apiece, from 640 pence apiece.

According to MP Evans' filing with the London Stock Exchange (LSE), the increased offer, which values the company at about £415.4 million, represents a premium of 74% to its closing price of 426.25 pence per share on Oct 24.

Separately, KLK, in a Bursa Malaysia filing, reiterated there is strategic merit in synergising the operations of MP Evans with KLK's from a geographical and capabilities perspective.

"The management of MP Evans will have opportunities to develop their careers within the larger organisation. Together, KLK and MP Evans should establish best practices for the further growth of both companies and enable the enlarged group to capitalise on economies of scale in the oil palm sector," it said.

Following the increased offer, KLK acknowledged that the group's gearing is expected to rise from about RM4.6 billion to RM6.9 billion. Pursuant to the deal, it expects its gearing ratio to climb to 0.65 times from 0.43 times, while its net gearing ratio would rise to 0.45 times from 0.23 times.

The deal, however, does not require KLK shareholders' approval.

The increased offer will succeed if KLK acquires control of over 50% equity interest of MP Evans, which is listed on the Alternative Investment Market of the LSE. KLK intends to maintain the listing status of MP Evans if it holds less than 75% equity interest in the company.

"KLK continues to believe that its all-cash increased offer is highly attractive for MP Evans shareholders, representing a compelling value proposition with a high degree of certainty at a substantial premium, and that it provides a significant opportunity for MP Evans shareholders to realise substantial value from their investment in the context of the low liquidity in the trading of MP Evans shares," said MP Evans.

The acquisition will be financed via a combination of an amended acquisition loan facility provided by The Hongkong and Shanghai Banking Corp Ltd and KLK's internal cash resources.

To recap, KLK, via wholly-owned subsidiary KL-Kepong International Ltd (KLKI), had on Oct 25 announced a cash offer of 640 pence per share to acquire MP Evans.

MP Evans owns oil-palm plantations in Indonesia and residential property development in Malaysia.

Its share price on the LSE climbed 11% to 695.5 pence after the revised offer was announced.

On Bursa, KLK shares rose 16 sen or 0.68% to close at RM23.70 for a market capitalisation of RM25.24 billion.

 

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