Felda’s takeover offer for FGV falls short


THE Federal Land Development Authority’s (Felda) attempt to raise its stake in FGV Holdings Bhd to 90% fell short of meeting the target despite multiple extensions to its deadline as some shareholders held out in hope of a higher offer price.

Maybank Investment Bank Bhd, in a statement issued on behalf of Felda, said the state-owned agency had 2.95 billion shares equivalent to an 81% stake in FGV on the final closing date yesterday.

Felda has managed to raise its shareholding in FGV by about 31% since it launched the mandatory takeover offer (MTO) at RM1.30 per share on Dec 8 last year.

This was after it bought over a 6.1% stake held by Retirement Fund Inc and a 7.78% interest held by Urusharta Jamaah Sdn Bhd for RM658 million, which raised Felda’s stake in FGV to over 50% from 21.24%.

Bloomberg data showed existing shareholders in FGV include the Pahang state government with 182.41 million shares or 5% equity interest, and the Sabah state government which has a 4.07% stake (148.54 million shares) through Sawit Kinabalu Sdn Bhd and chief minister state of Sabah.

A shareholder in FGV, who spoke on condition of anonymity, told The Malaysian Reserve (TMR) he had expected Felda to revise its offer price upward though he was not sure if Felda would be willing to up its price.

FGV’s share price has been trading in a tight price range of between RM1.30 and RM1.33 over the last three months since the offer was tabled by Felda. Several research houses maintained their ‘Neutral’ call on the counter with a target price of RM1.33 to RM1.39.

“Felda should put pressure on changing FGV’s current board and senior management. It should also negotiate with the respective state governments to transfer its shares to Felda,” he said.

Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed earlier said although the MTO would end, Felda had “measures and strategies” to buy the shares subsequently.

Putra Business School Assoc Prof Dr Ahmed Razman Abdul Latiff said the strategies may include engaging individual shareholders in the form of settlers who may not have access to dispose of their shares via the open market.

“The strategies could include tracking all these individual shareholders through Felda branch offices or village chiefs to get them to release their shares.

“It will probably take time, but Bursa (Malaysia) can always extend the deadline as Felda’s intention is to take FGV private,” Ahmed Razman told TMR.

Felda extended the closing date for the acceptance of the takeover offer for the third and final time last month to March 15. The original deadline was Feb 2, before it was postponed to Feb 16, and subsequently to March 2.

If Felda and the Public Accounts Committee succeed in controlling at least 90% of FGV shares, trading in the counter will be suspended upon expiry of five market days from the offer closing date.

Felda has indicated it does not intend to maintain the listing status of FGV on the Main Market of Bursa Malaysia. FGV’s shares settled at RM1.30 yesterday, valuing the company at RM4.74 billion.

Read our previous report here

Perspective Lane no longer pursuing FGV stake deal