MARKET DEVELOPMENT
FGV to Sign Documents Soon
FGV to Sign Documents Soon
17/08/2015 (The Star) - Felda Global Ventures Holdings Bhd (FVG) has substantially completed the due diligence for the proposed acquisition of a 37% stake in Indonesia stock exchange-listed PT Eagle High Plantations.
In a filing with Bursa Malaysia yesterday, FGV said it aimed to sign the definitive documents “as soon as reasonably practicable.”
“The company and the vendors are in the midst of finalising confirmatory due diligence and negotiating the terms of the definitive documentation (including the conditional sales and purchase agreements) and aim to sign the definitive documents as soon as reasonably practicable, and in any event by no later than Oct 31, 2015.”
According to reports, it is believed that FGV will likely hold an EGM as early as September to seek approval from its shareholders and relevant authorities on the deal.
FGV had in mid-June proposed to acquire the 37% stake in Eagle High from Rajawali Group, which is controlled by Indonesian business tycoon Tan Sri Peter Sondakh.
Under the terms of the deal, FGV will pay US$632mil cash for a 30% stake and offer 95 million new FGV shares for 7% more in Eagle High, which is equivalent to about US$47mil.
This will result in Rajawali Group owning about 2.6% in FGV once the deal, which needs approval from shareholders, among others, is concluded.
FGV will also acquire a 93.3% to 95% stake in Rajawali’s sugar project for US$67mil cash.
The shares of Eagle High and Rajawali Group’s sugar project will be owned by FGV unit FGV Kalimantan Sdn Bhd.
The FGV-Rajawali partnership, however, is subject to a definitive agreement, due diligence, approval from shareholders and the respective regulatory authorities.
Rajawali, one of Indonesia’s largest conglomerates, owns 65.5% of Eagle High, according to data compiled by Bloomberg. Eagle High, through its subsidiaries, has rights to about 419,000 ha and plantations in Kalimantan, Sulawesi, Papua and Sumatra provinces in Indonesia, its website shows.
FGV’s market capitalisation have more than halved since its debut on Bursa Malaysia and its proposal to acquire the stake in Eagle High has been criticised as being an expensive deal.
FGV group president and chief executive officer Datuk Mohd Emir Mavani Abdullah has defended the Eagle High deal, claiming that the company was paying a lower enterprise value (EV) at US$17,400 per planted ha, contrary to market talk that its purchase of Indonesia’s third largest listed oil palm planter was overpriced.
FGV has pointed out based on a comparative analysis, Sime Darby Bhd paid a higher EV per planted ha of US$25,900 for New Britain Oil Palm Ltd in 2014, while IOI Corp Bhd forked out an EV of US$23,500 per planted ha for Unico-Desa Plantations Bhd in 2013.
In a filing with Bursa Malaysia yesterday, FGV said it aimed to sign the definitive documents “as soon as reasonably practicable.”
“The company and the vendors are in the midst of finalising confirmatory due diligence and negotiating the terms of the definitive documentation (including the conditional sales and purchase agreements) and aim to sign the definitive documents as soon as reasonably practicable, and in any event by no later than Oct 31, 2015.”
According to reports, it is believed that FGV will likely hold an EGM as early as September to seek approval from its shareholders and relevant authorities on the deal.
FGV had in mid-June proposed to acquire the 37% stake in Eagle High from Rajawali Group, which is controlled by Indonesian business tycoon Tan Sri Peter Sondakh.
Under the terms of the deal, FGV will pay US$632mil cash for a 30% stake and offer 95 million new FGV shares for 7% more in Eagle High, which is equivalent to about US$47mil.
This will result in Rajawali Group owning about 2.6% in FGV once the deal, which needs approval from shareholders, among others, is concluded.
FGV will also acquire a 93.3% to 95% stake in Rajawali’s sugar project for US$67mil cash.
The shares of Eagle High and Rajawali Group’s sugar project will be owned by FGV unit FGV Kalimantan Sdn Bhd.
The FGV-Rajawali partnership, however, is subject to a definitive agreement, due diligence, approval from shareholders and the respective regulatory authorities.
Rajawali, one of Indonesia’s largest conglomerates, owns 65.5% of Eagle High, according to data compiled by Bloomberg. Eagle High, through its subsidiaries, has rights to about 419,000 ha and plantations in Kalimantan, Sulawesi, Papua and Sumatra provinces in Indonesia, its website shows.
FGV’s market capitalisation have more than halved since its debut on Bursa Malaysia and its proposal to acquire the stake in Eagle High has been criticised as being an expensive deal.
FGV group president and chief executive officer Datuk Mohd Emir Mavani Abdullah has defended the Eagle High deal, claiming that the company was paying a lower enterprise value (EV) at US$17,400 per planted ha, contrary to market talk that its purchase of Indonesia’s third largest listed oil palm planter was overpriced.
FGV has pointed out based on a comparative analysis, Sime Darby Bhd paid a higher EV per planted ha of US$25,900 for New Britain Oil Palm Ltd in 2014, while IOI Corp Bhd forked out an EV of US$23,500 per planted ha for Unico-Desa Plantations Bhd in 2013.