14/12/06 (The Edge Daily)  -  The Kuok Group, controlled by tycoon Tan Sri Robert Kuok, is undertaking a mammoth S$6.6 billion (RM15.18 billion) corporate exercise to merge several of its companies here and in Singapore, including Wilmar International Ltd and PPB Oil Palms Bhd.

As part of the deal, Wilmar has offered to acquire PPB Oil Palms, Kuok Oils & Grains Pte Ltd (KOG) and PGEO Group Sdn Bhd for about S$4.1 billion.

The proposed enlarged entity will emerge as Asia’s leading agribusiness group and enable Wilmar to be the world's leading merchandiser and processor of palm oil.

Wilmar said on Dec 14 the acquisition of the companies would be satisfied via the issue of 2.4 billion Wilmar shares based on their last transacted price of S$1.71 per share.

Wilmar via CIMB Investment Bank Bhd on Dec 14 made a conditional voluntary takeover offer (VGO) for PPB Oil Palms via the issue of 2.3 Wilmar shares for each PPB Oil Palms share, valuing the deal at S$1.8 billion based on PPB Oil Palms' paid-up capital of 445.42 million shares, or RM9.046 per PPB Oil Palms share. PPB Oil Palms' pre-suspension price was RM8.95.

Wilmar said it was exploring with CIMB the possibility of offering cash to PPB Oil Palms shareholders in lieu of Wilmar shares at a price to be determined later.

It also made an offer to acquire a combined stake of 72% in KOG from Kuok group companies, Kuok (Singapore) Ltd, Harpole Resources Ltd and Greenacres Ltd, for S$1.3 billion via the issue of 785.92 million Wilmar shares.

Wilmar also offered to acquire PPB Group Bhd subsidiary FFM Bhd’s entire 28% stake in KOG for S$522.6 million via the issue of 305.63 million Wimar shares.

KOG is the Kuok Group's flagship company involved in processing and international trading of oil and grain products.

As part of the exercise, Wilmar made an offer to FFM to acquire its 65.8% stake in PGEO for S$491 million via the issue of 287.12 million Wilmar shares.

Wilmar also proposed to acquire all of Wilmar Holdings Pte Ltd’s interests in its subsidiaries and associated companies for S$2.5 billion via the issue of 1.45 billion new Wilmar shares. Wilmar Holdings is also controlled by the Kuok group.

These subsidiaries and associates are involved in processing and distribution of edible oils and oil seeds and the principal operations are mainly in China, India and Africa.

“The merger will give Wilmar a significant presence in Malaysia and access to markets in which KOG is dominant.

"Given the major expansion in oil palm acreage especially in Indonesia, global palm oil production is expected to continue expanding rapidly,” Wilmar said.