FGV: Non-interested directors claim Felda offer is low

22 Jan 2021 / 16:32 H.

KUALA LUMPUR: The non-interested directors of FGV Holdings Bhd's (FGV) have recommended the company's shareholders to reject the mandatory take-over offer by the Federal Land Development Authority (Felda) due to the lower fair value offered at RM1.30 per share.

In a statement, FGV said the recommendation was made after careful examination of the terms and conditions of the offer and the rationale for the offer and future plans for FGV Group and its employees as disclosed in the offer document.

"Taking into consideration the opinions, views and recommendations by RHB Investment Bank Bhd (RHB IB), being the independent adviser for the offer, the offer price is ‘not fair’ as it is below the fair value by RHB IB which ranges from RM1.42 to RM1.60 per FGV share, or a discount of 8.5 per cent to 18.8 per cent," said FGV.

Meanwhile, RHB IB is of the view that the offer is ‘not fair but reasonable’ based on its evaluation of the offer and recommended the minority shareholders to accept the offer.

This was due to FGV not receiving any alternative proposals for the offer shares, including any offer to acquire the assets and liabilities of FGV Group.

The non-interested directors of FGV, namely Datuk Yusli Mohamed Yusoff, Datuk Mohd Anwar Yahya, Datin Hoi Lai Ping, Dr. Mohamed Nazeeb P. Alithambi and Dr. Nesadurai Kalanithi, have not concurred with the recommendation made by RHB IB for shareholders to accept the offer.

The directors said the management of FGV had since 2019 implemented a transformation programme, namely Business Plan 2019-2021, focusing on operational improvements and strengthening the governance and accountability in line with FGV’s status as a public listed company (PLC).

"Keeping FGV as a PLC will ensure the transparency and timely disclosures of FGV, being one of the largest plantation companies in the world in terms of crude palm oil production with over three million tonnes produced in 2019."

In recommending shareholders to accept the offer, RHB IB also said that Felda and persons acting in concert with it have a collective shareholding of 54.09 per cent as at Jan 15, 2021), which provides them control over matters and are able to determine the outcome of resolutions sought at general meetings of FGV.

The number of FGV shares acquired by Felda so far this week amounted to 66 million shares.

On Jan 12, Felda issued an offer document in relation to its unconditional mandatory take-over offer for all remaining shares in FGV which it does not own, except treasury shares.

Felda also said it does not intend to maintain the listing status of FGV on the Main Market of Bursa Malaysia.

Shareholders will have until 5 pm on Tuesday, Feb 2, 2021 to accept the offer, unless revised or extended.

Any such revision or extension will be announced by Maybank Investment Bank Bhd (Maybank IB), the principal adviser on behalf of Felda, at least two days before the closing date, and notice of such revision or extension will be posted to the shareholders accordingly.

At 3.55 pm today, FGV shares were flat at RM1.30 with 3.53 million shares transacted, while its market capitalisation stood at RM4.74 billion. - BERNAMA

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