United Malacca Shareholders Advised To Reject RM6.10 Offer
13/10/2026 (Business Today) - Kenanga Investment Bank Research has advised United Malacca Bhd (UMCCA) shareholders not to accept the Tee family’s mandatory takeover offer (MGO) of RM6.10 per share, citing the offer’s discount to the plantation group’s net tangible assets (NTA) and its own target price of RM7.
The research house maintained its OUTPERFORM recommendation on United Malacca, noting that the RM6.10 offer represents a discount of approximately 18% to the company’s FY2026 NTA of RM7.44 per share and 12.9% to Kenanga’s target price.
It added that the offer price was only 2.5% above United Malacca’s last closing share price, making it relatively unattractive to existing shareholders.
However, Kenanga recommended that eligible former shareholders pursue the separate cash compensation scheme introduced to address an earlier mandatory takeover obligation.
The takeover offer follows Prosper Trading Sdn Bhd’s acquisition of 28.19 million United Malacca shares, representing a 13.4% stake, from Great Eastern Life Assurance (Malaysia) Bhd for RM171.9 million.
Prosper Trading, jointly controlled by Tee Kim Tee and Tee Cheng Hua, is involved in palm product trading and investment holding activities.
Following the acquisition, the collective shareholding of Prosper Trading, the Tee family and parties acting in concert increased to approximately 47.7%, triggering the mandatory takeover offer for the remaining shares.
Kenanga highlighted that the Tee family had previously crossed the 33% mandatory takeover threshold on Sept 26, 2024, when its collective shareholding reached 33.7%, without making the required offer at that time.
The oversight was discovered during preparations for the latest acquisition.
To regularise the position, the offerors have introduced a cash compensation scheme for eligible shareholders who sold United Malacca shares between Sept 26, 2024, and Oct 9, 2026, at prices below RM6.10.
Eligible investors include shareholders registered as at Sept 26, 2024, and those who acquired shares between Sept 25 and 26, 2024.
Compensation will be calculated based on the difference between the actual selling price and the RM6.10 takeover offer price.
Shares acquired after Sept 26, 2024, or sold above RM6.10 will not qualify.
The compensation scheme is scheduled to close on Dec 17, 2026.
Kenanga remained positive on United Malacca’s longer-term prospects, supported by expectations of elevated crude palm oil (CPO) prices and improving productivity from its Indonesian plantations.
The research house expects edible oil supply to remain tight over the next six to 12 months due to a potentially severe El Niño episode, while demand should remain supported by food consumption and biodiesel requirements.
Kenanga maintained its CPO price assumptions of RM4,700 per tonne for FY2027 and RM4,500 for FY2028.
It also retained its core earnings per share forecasts of 79.6 sen for FY2027 and 65.1 sen for FY2028.
Annual dividend forecasts were maintained at 30 sen and 20 sen per share, respectively.
Kenanga said United Malacca’s net cash position and healthy cash flows should support continued dividend payments.
The research house maintained its RM7 target price, based on 0.9 times price-to-book value, noting that the group’s Indonesian estates are gradually entering a higher-yielding maturity profile.
While a stronger harvest recovery could support a valuation upgrade, Kenanga said it was maintaining a cautious approach following a weaker first-quarter FY2027 harvest.
Overall, Kenanga believes United Malacca offers attractive underlying value and that shareholders would be better served by retaining their shares rather than accepting the RM6.10 mandatory takeover offer.