07/11/2017 (The Star Online)  - KUALA LUMPUR: The listing reference prices of Sime Darby Plantation Bhd (SD Plantation) and Sime Darby Property Bhd (SD Property) will be 60%-68% and 16%-19%, respectively, of Sime Darby Bhd

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’s closing share price on the last day of cum entitlement trading.

In a circular to shareholders dated Nov 4, the conglomerate said its board had taken into consideration several factors in deciding the percentage allocation range.

These include the soon-to-be-listed entities’ trading multiples (price-to-earnings ratio for SD Plantation and price-to-book rsatio for SD Property), Sime Darby Bhd’s market price from Jan 25 (the last trading day prior to the company’s initial announcement on the proposals) and the final dividend of 17 sen per Sime Darby share to be paid on Dec 20.

Sime Darby, which is pursuing a pure-play strategy by listing its plantation and property businesses, explained that the range for SD Plantation’s listing reference price was wider given its exposure to fluctuations in crude palm oil prices.

Based on Sime Darby’s closing price of RM9.05 on Oct 13 (the last trading day of Sime Darby shares before Oct 15, the last practicable date prior to the circular’s date), the illustrative listing reference prices for SD Plantation will range from RM5.43 to RM6.15, for SD Property from RM1.45 to RM1.72, and for Sime Darby from RM1.18 to RM2.17 (calculated as residual).

The midpoint prices are RM5.79 for SD Plantation, RM1.58 for SD Property, and RM1.68 for Sime Darby.

The expected market capitalisation of SD Plantation, SD Property and Sime Darby on listing will be determined based on their listing reference prices and the enlarged issued share capital of SD Plantation and SD Property (6.8 billion shares each).

Sime Darby said based on the illustrative listing reference prices, SD Plantation - the world’s largest producer of certified sustainable palm oil - would have a market capitalisation ranging from RM36.93bil to RM41.83bil.

For SD Property, the range will be RM9.86bil to RM11.70bil, while Sime Darby Bhd’s market cap will be between RM8.03bil and RM14.76bil (calculated as the residual after deducting the other two entities’ illustrative listing reference prices from Sime Darby shares’ closing price as at Oct 13).

Sime Darby said its share price would be adjusted after the proposed distribution of its entire shareholding in SD Plantation and SD Property. This is to ensure that the total net worth of its shareholders will be the same before and after the proposed distribution.

This adjustment will be done by deducting the listing reference price of SD Plantation and SD Property from Sime Darby shares’ last closing price.

The final listing reference price will be determined by the two companies’ respective board of directios in consultation with principal adviser Maybank Investment Bank after considering various factors.

The EGM for Sime Darby shareholders to decide on its proposed demerger exercise will take place on Monday, Nov 24.