All eyes are set on FGV Holdings Bhd’s shares today, hours after the Federal Land Development Authority (Felda) announced its proposal to take over FGV at RM1.30 a share, or 2.3 per cent above Monday closing price of RM1.27.
Trading of the plantation stock, which had resumed this morning after being suspended from 4.15pm yesterday, saw the shares slipping by two sen to RM1.25 as at 10am.
Yesterday, Maybank Investment Bank Bhd (Maybank IB) said Felda is increasing its stake in FGV by 13.9 per cent to 35.12 per cent and is proposing to take FGV private at RM1.30 a share.
It said Felda has entered into a conditional share purchase agreement with Kumpulan Wang Persaraan (Diperbadankan) and Urusharta Jamaah Sdn Bhd to purchase 506.19 million FGV shares for a collective RM658 million, or RM1.30 per share.
Upon completion of the proposed acquisitions, Felda, together with parties acting in concert (PAC) would own more than 50 per cent of FGV shares.
Maybank IB is the principal adviser to Felda for the said proposals.
In a note, CGS-CIMB Securities Sdn Bhd said the move was probably a more efficient way for Felda to consolidate and restructure its assets, and a potentially cheaper option than terminating its land lease agreement with FGV.
“We view this deal to be neutral for FGV shareholders,” it said, retaining its “hold’ rating on FGV’s shares, with a lower target price of RM1.30.