Sime Darby shares trade to be suspended for 3 days

By NG MIN SHEN / Graphic by TMR

Trading of Sime Darby Bhd shares will be suspended for three days beginning Nov 27, 2017, as the conglomerate embarks on the final leg of separating its core businesses into “pure plays”.

The country’s fourth-biggest listed firm based on market capitalisation is demerging the plantation, property and other industrial division into three separate entities.

The listings of Sime Darby’s plantation and property divisions have been slated for Nov 30.

Sime Darby told Bursa Malaysia that it had received shareholders’ approval at the company’s EGM on Monday for the proposed demerger of the plantation and property units.

Sime Darby, which is presently valued at RM61 billion, said the share suspension from 9am on Monday, Nov 27, was to facilitate the proposed distribution following the demerger.

The last day of trading of Sime Darby shares will be at 5pm on Friday, Nov 24. All structured warrants relating to Sime Darby will also be suspended. Shares of Sime Darby “pure plays” will start to trade at the local bourse on Nov 30.

The diversified conglomerate announced early this year on the proposed plan to spin off its plantation and property businesses into two new listed companies. The rest of its businesses including heavy equipment, ports, motor, trading and logistics will remain with Sime Darby.

Shares in the two new companies — Sime Darby Plantation Bhd (SD Plantation) and Sime Darby Property Bhd (SD Property) — will be distributed to existing Sime Darby stakeholders.

Upon completion of the distribution, the entitled shareholders will hold SD Plantation and SD Property shares in the same proportion as their shareholdings in Sime Darby.

The ex-date for the shares is Nov 27. Sime Darby is expected to announce the final reference prices for the three entities on Nov 24.

As indicated by the group, the listing reference price of the two new listed entities will fall within the percentage allocation range of between 60% and 68% for SD Plantation and between 16% and 19% for SD Property, to be applied to Sime Darby’s closing share price on the last day of cum entitlement trading.

It said the range for SD Plantation’s listing reference price was wider due to its exposure to fluctuations in crude palm oil prices.

The group said in a circular to shareholders dated Nov 4 that it had considered several factors when deciding the percentage allocation range, including the new entities’ trading multiples, Sime Darby’s market price from Jan 25 — the last trading day prior to the company’s initial announcement of its pure-play strategy — and the final dividend of 17 sen per Sime Darby share to be paid on Dec 20.

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, SD Property (RM1.45 to RM1.72) and Sime Darby (RM1.18 to RM2.17).

Post-demerger, the share price of Sime Darby will be adjusted by subtracting the listing reference price of the plantation and property entities from the last closing price of Sime Darby’s shares, to ensure the total net worth of its shareholders will be the same before and after the proposed distribution.

Sime Darby shares ended yesterday’s trading to close two sen lower at RM8.97 yesterday with a market capitalisation of RM61.07 billion.