Research houses say voluntary takeover offer at RM1.30 per share is a ‘fair price’ for investors.
They said this second attempt by Felda to privatise the plantation group via a takeover offers a “prudent exit opportunity” for investors.
Analysts also pointed to limited upside potential for the increasingly illiquid stock if the offer does not succeed, and the likelihood of it languishing at its pre-announcement trading levels.
For much of April, it was trading just below the RM1.10 level. It closed up 2 sen or 1.6% at RM1.30, valuing the group at RM4.74 billion.
The current share price is a far cry from when FGV was listed on Bursa Malaysia 13 years ago to great fanfare. The initial public offering (IPO) raised about RM10.5 billion, giving it a market capitalisation in excess of RM16 billion.
It was hailed as the world’s second largest IPO that year after Facebook when FGV was listed in June 2012.
On listing, it traded as high as RM5.46, a 20% premium to its IPO price of RM4.55. The shares have since plummeted 76% from that high, and 71% from the IPO price.
MIDF Amanah Investment Bank advised shareholders to accept Felda’s takeover offer, which would pave the way for FGV’s delisting from Bursa.
“The RM1.30 offer price represents a 12% premium over its fair value estimate of RM1.16,” it said in a note today.
It noted that Felda and its persons acting in concert (PACs) collectively hold approximately 86.93% FGV’s total issued shares.
“The offer, priced at RM1.30 per share – similar to the bid made in 2020 – aims to raise their stake to at least 90%, which would allow Felda to delist FGV,” it added.
TA Securities noted Felda’s offer would be the second time investors are presented with an opportunity to realise the value of their investment through a cash offer.
“Given the potential price risk post GO (general offer), we advise minority shareholders to accept the offer.
“We advise investors to switch to other undervalued plantation stocks with more compelling stories, and potentially higher earnings growth, such as United Malacca Bhd,” it said in a note today.
Hong Leong Investment Bank said Felda’s offer price exceeds its sum-of-parts-derived target price (TP) of RM1.26.
It has maintained its “hold” call on FGV, with a revised TP of RM1.30 from RM1.26 previously, and kept its earnings forecasts unchanged.
This marks Felda’s second attempt to privatise FGV following a previous offer in 2020. The earlier offer, also at RM1.30 per share, failed to attain the 90% shareholder acceptance threshold for a mandatory compulsory acquisition.
Analysts are optimistic the latest offer has a higher probability of success given that Felda and its PACs already hold almost 87% currently.
The latest offer will remain open for a minimum of 21 days and is set to expire on June 15, 2025, unless extended or withdrawn.
Full ownership of FGV will enable Felda to streamline operational decision-making processes, accelerate ongoing turnaround efforts, and better integrate its upstream and downstream activities with Felda’s development objectives. - FMT
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.