KUALA LUMPUR (Dec 12): Amid talk of the Federal Land Development Authority (FELDA) wanting to terminate the land lease agreement it has with its 33.6%-owned subsidiary FGV Holdings Bhd, the government agency, however, announced on Monday that it is raising its stake to more than 50% and will be undertaking a mandatory takeover offer for the remaining shares it doesn’t own at RM1.30 a share.
FELDA said it will acquire a 13.88% equity interest in FGV from two state-linked agencies — Retirement Fund (Incorporated) (KWAP) and investment holding company Urusharta Jamaah Sdn Bhd — for RM658 million in cash, raising its stake in the agribusiness giant to more than 50%.
It is not clear if FELDA intends to maintain the listing status of FGV and whether it has secured funding for the proposal.
Just in October, tycoon Tan Sri Syed Mokhtar Albukhary’s Perspective Lane (M) Sdn Bhd (PLSB) expressed interest to participate in FGV via an injection of plantation assets for shares. The plan was for PLSB to inject Tradewinds Plantation Bhd for a controlling block of shares in FGV, but some sources privy to the details of the asset injection questioned his valuation of Tradewinds Plantation.
Will Syed Mokhtar put up a fight for FGV?
What is FELDA’s game plan for FGV?
In the close to eight years that FGV has been listed, its share price has tumbled from its issue price of RM4.55 in its initial public offering (IPO) to RM1.19 yesterday, a decline of 73.85%.
But with FGV trading at RM1.19, the RM1.30 offer is still a 9% premium and good enough reason for the minorities to exit from the group, analysts said.
However, they would not be able to enjoy any upside to the group’s improved operations.
In this week’s cover story, The Edge Malaysia takes a look at the questions arising from FELDA’s plan and FGV’s past controversial deals.