FGV shares down following Felda's takeover proposal

KUALA LUMPUR (Dec 9): All eyes are set on FGV Holdings Bhd's shares today, hours after the Federal Land Development Authority (Felda) announced its proposal to take over FGV at RM1.30 a share, or 2.3% above yesterday's closing price of RM1.27.

Trading of the plantation stock, which resumed this morning after being suspended from 4.15pm yesterday, saw the shares slip by two sen to RM1.25 as at 10am.

Yesterday, Maybank Investment Bank Bhd (Maybank IB) said Felda was increasing its stake in FGV by 13.9% to 35.12% and was proposing to take FGV private at RM1.30 a share.

It said Felda had entered into a conditional share purchase agreement with Kumpulan Wang Persaraan (Diperbadankan) and Urusharta Jamaah Sdn Bhd to purchase 506.19 million FGV shares for a collective RM658 million, or RM1.30 per share.

Upon completion of the proposed acquisitions, Felda, together with parties acting in concert, would own more than 50% of FGV shares.

Maybank IB is the principal adviser to Felda for the said proposals.

In a note, CGS-CIMB Securities Sdn Bhd said the move is probably a more efficient way for Felda to consolidate and restructure its assets, and a potentially cheaper option than terminating its land lease agreement with FGV.

"We view this deal to be neutral for FGV shareholders," it said, retaining its "hold" rating on FGV's shares, with a lower target price of RM1.30.