Malaysia’s KLK offers $372 mln for majority stake in IJM Plantations

Article content

KUALA LUMPUR — Malaysian palm oil giant Kuala Lumpur Kepong (KLK) Bhd plans to acquire IJM Corporation Bhd’s stake in IJM Plantations Bhd for 1.53 billion ringgit ($372 million) in cash, the companies said on Wednesday.

Construction group IJM Corp said it had agreed in principle to sell its 56.2% holding, while KLK said that once the deal was done, it would make a mandatory general offer to buy the remaining IJM Plantations shares it did not own.

Shares in IJM Plantations jumped 23.2% at the morning bell on Thursday. IJM Corp climbed 8.4%, while KLK rose 1.7%.

KLK offered to buy the stake at 3.10 ringgit per share, a 26% premium to IJM Plantations’ last traded share price before the announcement and valuing it at 2.73 billion ringgit. Analysts said the offer was fair.

IJM Corp’s disposal of its plantation division comes at an opportune time, capitalizing on a crude palm oil upcycle to fetch a higher valuation, MIDF Research analyst Khoo Zhen Ye said in a note.

IJM Plantations posted record profit in its last financial year but was loss-making in the previous two years.

The deal will also allow IJM Corp to strengthen its balance sheet so that it can take on large construction and infrastructure projects, Khoo said.

KLK has a total planted area of 223,964 hectares across Malaysia, Indonesia and Liberia. Acquiring IJM Plantation, which has a planted area of 60,966 hectares across Malaysia and Indonesia, could expand KLK’s planted area by around 27%.

“It will also allow KLK to lower its average estate age profile slightly,” Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note on Thursday.

($1 = 4.1160 ringgit) (Reporting by Mei Mei Chu, Additional reporting by Liz Lee, Editing by Bernadette Baum and Edwina Gibbs)

Source link


Effective Tips for Preparing And Recovering From Hand Surgery

Effective Tips for Preparing And Recovering From Hand Surgery. Consulting your doctor about your hand issue or injury and confirming the surgery appointment are the big steps that you have taken so far.

Mysterious air base being built on volcanic island off Yemen

A mysterious air base is being built on a volcanic island off Yemen that sits in one of the world's crucial maritime chokepoints...

AC service in Jacksonville, FL: 8 common problems that may require service!

It’s no secret that Jacksonville, FL is one of the most humid places in the country. And with that humidity comes a whole host...

Guide To Kids Foot Width & Choosing The Right Shoe Width

The formative years in a child’s life are extremely important, both mentally and physically. As their bodies grow and change, it is important that...

Game Development Life Cycle In a Nutshell

When planning a game development project, any entrepreneur strives to build the workflow in a way to be on time for a release date...