French giant mulls pulling out of FGVH IPO

KUALA LUMPUR, June 19 — Louis Dreyfus Commodities Asia may be withdrawing from investing in FELDA Global Ventures Holdings Bhd (FGVH), just a week ahead of the world’s No. 3 largest palm oil operator’s market debut on June 28.

The Edge Financial Daily reported today the French agri-business giant was reconsidering its 2.5 per cent strategic stake in FGVH due to the high fees imposed and the involvement of too many other cornerstone investors.

The world’s largest IPO this year after Facebook had attracted a strong cast of 10 cornerstone investors, including AIA Group, Hong Kong’s Value Partners, Fidelity Investments and Middle Eastern sovereign fund Qatar Holding LLC.

“The allocation of shares was supposed to be finalised yesterday, but Louis Dreyfus did not make it,” the business paper quoted an unnamed source as saying.

The paper said its source added that there may be other provisions for the French firm to come in with a smaller stake later.

Louis Dreyfus had initially been invited to take up a 4.9 per cent share in FGVH’s initial public offering (IPO) when it debuts on Bursa Malaysia on June 28 but The Edge reported the allocation was cut to 2.5 per cent. 

The Paris-based group had signed a Memorandum of Understanding (MoU) with FGVH just last month.

The paper reported that FGVH had declined comment when contacted, and said it would make announcements if there were any developments.

The planned June 28 listing will create the world’s third-largest palm oil operator with a market capitalisation of RM16.6 billion.

The IPO will be the largest in Asia since February 2011 and the second biggest this year behind social media network Facebook’s float which raised US$16 billion (RM49.6 billion).

Putrajaya is forging ahead with FELDA’s controversial public listing despite criticism from some settlers and the opposition who claim that it will shortchange some 112,000 settlers nationwide.