Trading suspensions hit BPlant and KL Kepong amidst uncertain deal

TRADING in the securities of Boustead Plantations Bhd (BPlant) and Kuala Lumpur Kepong Bhd (KLK) has been halted.

This move follows a cascade of developments centered around a multi-billion-ringgit deal and has left investors and market observers eagerly anticipating critical announcements from the two Malaysian agribusiness giants.

Bursa Malaysia Securities Bhd granted BPlant’s request for a trading suspension of its ordinary shares today. The suspension is in effect from 9 am to 5 pm on October 3, 2023. 

This decision is pending the release of what has been described as a “material announcement” by BPlant. 

Adding to the intrigue, BPlant had also seen a suspension in short selling of its securities yesterday when the last transaction price of its approved securities fell more than 15% below the reference price. 

Such actions are taken to maintain market stability during periods of rapid price declines.

In a related development, KLK announced its own trading suspension, effective from 9.02 am today. 

KLK’s decision to halt trading is pending an announcement by Boustead Plantations, indicating that KLK may be closely monitoring and reacting to unfolding events involving its counterpart.

At the heart of this trading turmoil is a significant deal that has, by all appearances, unraveled. 

KLK had previously announced its intent to acquire a 33% ownership stake in BPlant, along with one share, from Boustead Holdings Bhd (BHB) and the Armed Forces Fund Board (LTAT) for a substantial RM1.15 billion. The deal was structured at a price of RM1.55 for each BPlant share.

However, recent reports suggest that this deal, which was scheduled to be finalised by a specific date, has fallen through, leading to a cascade of reactions in the market. 

The extension of the cut-off date for the deal to October 6, 2023, had previously been agreed upon by KLK, LTAT, and BHB, with plans to launch a mandatory general offer for the remaining BPlant shares at RM1.55 per share once the deal was sealed. – TMR