Kuala Lumpur Kepong Bhd now holds 498.16 million shares in IJM Plantations Bhd, or 56.57% of the company. A filing with Bursa Malaysia on September 6 confirmed that KLK had finished buying IJM Corp’s 56.2% stake for RM1.53 billion in cash, which makes IJM Plantations a KLK subsidiary.
The price was set, IJM Plantations said, on a willing-buyer willing-seller basis, using the figure KLK offered. KLK shares closed that day seven sen lower at RM20.8, with 458,000 shares changing hands.
How the offer arrived
The approach came on a Wednesday in June. IJM Corp said it had received a letter from KLK, one of the country’s largest palm oil planters, offering RM3.10 per share (RM1.53 billion converts to S$492.05 million). IJM Corp agreed in principle to settle terms. KLK said it would have to extend a mandatory general offer for the remaining IJM Plantations shares once the agreement was signed, and that it had the financial resources to see the deal through.
RM3.10 was a 26 per cent premium to the last traded price of RM2.46 and valued IJM Plantations at RM2.73 billion. Analysts called the offer reasonable. The shares had already climbed 35 per cent that year, lifting market capitalisation to RM2.16 billion.
MIDF Research analyst Khoo Zhen Ye wrote that IJM Corp was selling a loss-making division at a good moment, using a crude palm oil upcycle to get a higher valuation. The plantation firm had posted record profit for its 2021 financial year after two loss-making years.
What KLK gets
KLK’s own planted area stands at 223,964 hectares across Malaysia, Indonesia and Liberia. IJM Plantations adds 60,966 hectares in Malaysia and Indonesia. By the Reuters tally, that would expand KLK’s planted area by about 27 per cent and raise its palm oil production.
On the other side, Khoo said the sale lets IJM Corp, which mainly builds, develops property and runs infrastructure, strengthen its balance sheet so it can take on mega construction and infrastructure projects.
IJM’s shareholders signed off on the disposal at the annual general meeting on August 26. IJM said the sale fits its plan to streamline its construction, property, industry and infrastructure businesses.
Sources
- KLK completes purchase of IJM's stake in IJM Plantations
- Malaysia's KLK offers RM1.53b for majority stake in IJM Plantations
- IJM gets shareholders' nod to sell controlling stake in IJM Plantations to KLK for RM1.53b
Sources
- KLK completes purchase of IJM's stake in IJM Plantations – The Star
- Malaysia's KLK offers RM1.53b for majority stake in IJM Plantations
