by SHAHEERA AZNAM SHAH / pic by TMR FILE
FIVE of FGV Holdings Bhd’s non-interested directors advised the shareholders to reject the Federal Land Development Authority’s (Felda) offer to acquire all the remaining shares of the planter.
FGV said in a statement today that the non-interested directors believed the recommendation offer price of RM1.30 per share is below fair value.
“The non-interested directors of FGV have not concurred with the recommendation to accept the offer as the offer price is “not fair”.
“It is below the fair value by RHB Investment Bank ranging from RM1.42 to RM1.60 per FGV share or 8.5% to 18.8% below the fair value per FGV share,” it said.
FGV said the directors, namely Datuk Yusli Mohamed Yusoff, Datuk Mohd Anwar Yahya, Datin Hoi Lai Ping, Dr Mohamed Nazeeb P. Alithambi and Dr Nesadurai Kalanithi, have made their recommendation based on the rationale and future plans of the company.
“Their recommendation is 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, and taking into consideration the opinions, views and recommendations by RHB Investment Bank as set out in the Independent Advice Circular (IAC),” it said.
The directors are also of the opinion that maintaining FGV as a public listed company will keep the transparency and timely disclosure of the company which suits the firm’s positions as one of the largest plantation companies globally, FGV said.
“Keeping FGV as a public listed company 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 (CPO) production with over 3 million metric tonnes produced in 2019, approximately 15.5% of Malaysia’s production and 4.1% of world’s production.
“The company also has a significant public interest and impact on the corporate world of Malaysia,” FGV said.
FGV said the directors viewed that there are discrepancies in the share price between the initial public offering (IPO) and offer price given the improvement of the Felda’s oil palm plantations under the FGV’s management.
“At the IPO price of RM4.55 per share and now being offered to be acquired at RM1.30 and taking into consideration of the significant improvement on the quality of plantation assets of FGV since IPO, the non-interested directors are unable to, with a clear conscience recommend the offer as “reasonable” to the minority shareholders of FGV, which also include settlers and employees of Felda and FGV,” it said.
FGV added that the improvements made on the quality of plantation assets include improvements to the average age profile from 16.25 years in 2012 to 13.77 years in 2019 through aggressive replanting efforts, incurring approximately RM5.3 billion since 2012 to cover replanting costs, improvements on housing for workers, fertiliser costs and increased landbank size since IPO from 382,603 hectares to 439,230 hectares in 2019.