KUALA LUMPUR (Oct 26): CIMB Investment Bank Bhd said Kuala Lumpur Kepong Bhd's (KLK) planned acquisition of UK-listed M.P. Evans Group Plc is "opportunistic" and "attractive" at a time when the ringgit had strengthened against the pound sterling.

Yesterday, plantation group KLK said it planned to buy plantation and real estate entity M.P. Evans' entire stake for £359.3 million (about RM1.82 billion) or 640 pence a share in an all-cash deal.

KLK said M.P. Evans owns oil palm plantations in Indonesia and Malaysia.

Today, CIMB analyst Ivy Ng Lee Fang said the acquisition could enhance KLK's earnings by 3% for financial year ending Sept 30, 2018 (FY18) based on consensus forecast.

"Opportunistic acquisition by KL Kepong? We are surprised by this news. KL Kepong may have viewed the recent weakness in the pound as well as the weak plantation earnings as a good opportunity to launch a takeover offer for M.P. Evans.

"We are positive on the bid as we estimate the group will be acquiring the assets at an attractive price and the proposed acquisition will enhance its future earnings," said Ng, who maintained CIMB's KLK earnings forecast for now, pending the outcome of the planned acquisition.

She also maintained CIMB's "hold" call on KLK shares with an unchanged target price of RM24.90. At 12:30pm, KLK shares rose six sen or 0.25% to settle at RM24.30 for a market value of RM25.82 billion.

Meanwhile, the ringgit strengthened to 5.0576 against the pound sterling as investors evaluated the impact of the UK's planned exit from the European Union. Over the last one year, the ringgit-pound sterling exchange rate was between 5.0400 and 6.6970.