KLK’s Bid to Acquire BPlant Called Off: RM1.15 Billion Deal Abandoned

Kuala Lumpur Kepong Bhd (KLK) ambitious plan to acquire a 33% stake in Boustead Plantations Bhd (BPlant) for RM1.15 billion has been scrapped. 

The deal’s collapse comes after a series of deadline extensions and mounting speculation, ultimately leading to the termination of what had been a highly anticipated strategic partnership.

The respective announcement from parties involved sheds light on the critical factor behind this decision—the failure to meet the condition precedent outlined in the Strategic Collaboration Agreement (SCA) by the revised cut-off date of October 6, 2023. 

Consequently, all parties involved, including KLK, BPlant, Boustead Holdings Bhd (BHB), and Lembaga Tabung Angkatan Tentera (LTAT), have unanimously agreed to terminate the SCA, effectively concluding their strategic collaboration as of October 4, 2023.

“The board of BPlant wishes to announce that the controlling shareholders of the Company, BHB and LTAT, have informed the company that the condition precedent under the SCA will not be satisfied by the cut-off Date of October 6, 2023 and accordingly, the parties to the SCA have agreed not to proceed with the Proposed Strategic Collaboration.

“In the circumstances, the transacting parties mutually agree that the SCA shall be terminated with immediate effect on October 2023,” BPlant told the bourse today.

As a result of the termination, BHB will promptly return the deposit, equivalent to the sum of RM229.15 million, to KLK within 14 business days from October 4, 2023, or as may be mutually agreed upon by the parties.

The initial announcement of KLK’s bid to acquire a significant stake in BPlant had generated significant excitement within the industry. 

The deal was structured at a price of RM1.55 per BPlant share, signaling KLK’s strategic aspirations within the Malaysian agribusiness sector.

However, as the deadline for the deal was pushed back twice, first to September 22 and subsequently to October 6, 2023, doubts and uncertainties began to emerge. 

Reports of the deal’s impending demise circulated, causing concern among investors and industry observers.

KLK has moved swiftly to reassure its stakeholders that the termination of the deal is not anticipated to have a substantial material impact on its financials, including key metrics such as earnings, earnings per share, net assets, and net assets per share. –TMR