FGV offers to buy Singapore’s APL for RM628m

PETALING JAYA: Felda Global Ventures Holdings Bhd (FGV) wants to buy Singapore-incorporated plantation company Asian Plantations Ltd (APL) for GBP120 million (RM628 million).
APL is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and owns 60,840 acres (24,622 ha) of oil palm plantations through its five wholly-owned estates in Miri and Bintulu, Sarawak.
FGV said in a statement last Friday that it intends to make a voluntary conditional cash offer for all of the ordinary shares (excluding treasury shares) in the issued capital of APL at the price of GBP2.20 per share.
"The offer price represents a 5.4% premium over the weighted average price on AIM of GBP2.0874 for the one-month period prior to the last trading day of Aug 29, 2014, when the offer was made," it said.
The offer price of GBP2.20 also represents a premium of about 294.7% over the net asset value per share of GBP0.5574 as at Dec 31, 2013.
The group said it will pay for the acquisition with initial public offering (IPO) proceeds.
"Based on all the competitive acquisitions FGV has been looking at, this is the most attractive option for similar brownfield sites in Malaysia and Indonesia."
"FGV continues to seek opportunities to strengthen our leading position in the oil palm plantation business, through organic and inorganic growth. We are attracted to APL's strong operational performance and high-quality estates and are confident they will bolster FGV's lead in sustainable palm oil production," FGV group president and CEO Mohd Emir Mavani Abdullah said in a statement.
He added that the acquisition complements the group's long-term expansion strategy as it works towards becoming the world's top 10 agribusiness player and a leader in the sectors of palm oil, rubber and sugar by 2020.
"We will derive synergies across FGV and APL. Through the sharing of common resources and expertise, we will enhance our operations and optimise costs. These are expected to contribute positively towards the performance of the enlarged FGV group," he added.
APL's estates are serviced by its 60MT per hour palm oil mill, which is located within the estates and within easy reach to the deep water port of Bintulu, where four of the big palm oil refineries in Sarawak are located.
FGV intends to double the productivity of the mill once it completes the purchase. It intends to complete the offer by the fourth quarter of 2014, de-list the company from the AIM.
With this acquisition, FGV will be the world's third largest plantation operator by hectarage with a total of more than 450,000 ha in Malaysia and Indonesia. The group is also the largest crude palm oil producer in the world with about 18% of Malaysia's production and 7% of the world's production.