Latest news with #Felda
New Straits Times
2 days ago
- Business
- New Straits Times
Felda lifts FGV stake past 82pct, needs 90pct by July 8 for delisting
KUALA LUMPUR: The Federal Land Development Authority (Felda) has raised its stake in FGV Holdings Bhd to more than 82 per cent, in its second attempt to privatise the plantation group ahead of the July 8 deadline. Felda acquired a total of 2.25 million FGV shares between May 27 and June 3, increasing its direct stake to 69.82 per cent or 2.55 billion shares, exchange filings showed. Including holdings by parties acting in concert (PACs), Felda now controls 82.24 per cent of FGV, or just over three billion shares. The transactions follow the state-backed rural development agency's unconditional voluntary takeover offer launched on May 26. The offer, priced at RM1.30 per share, is being made via Maybank Investment Bank Bhd on behalf of Felda to acquire all remaining shares not already owned by Felda and its PACs. The offer is classified as unconditional because Felda already holds more than 50 per cent of FGV's voting shares, giving it control without needing further shareholder approval. However, to delist the company, Felda must raise its stake to 90 per cent by the offer's closing date on July 8. If that threshold is reached, trading in FGV shares will be suspended five market days later, followed by a formal withdrawal from the Main Market. This is Felda's second attempt to privatise FGV. A similar offer made in December 2020 at the same price closed in March 2021 with Felda holding about 81 per cent, below the level needed to trigger a compulsory acquisition. FGV's public shareholding spread has remained below the 25 per cent minimum required by Bursa Malaysia ever since. As of May 13, the public float stood at 13.09 per cent. Kenanga Investment Bank Bhd has been appointed as the independent adviser. Trading in FGV shares has picked up sharply in recent weeks. The stock began the year at RM1.12 and had mostly hovered between RM1.01 and RM1.16 prior to the takeover announcement. On May 2, shares jumped to RM1.19 from RM1.09, with volume surging to 3.97 million shares. It was the counter's busiest session in a year, fuelling talk that the market had already sniffed out Felda's return. The rally intensified in mid-May, with the stock hitting RM1.35 on May 16, its highest level since the early May spike. On May 27, a day after the offer was announced, volume rose to 6.96 million shares. This marked the stock's busiest trading day in more than two years, with the price closing at the offer level of RM1.30. At market close, FGV shares rose one sen, or 0.77 per cent, to RM1.31, with 652,300 shares traded. This gave the company a market value of RM4.74 billion. FGV made its debut on Bursa Malaysia in June 2012, raising RM10.4 billion at RM4.55 a share. The initial public offering, which valued the group at RM16.6 billion, was the world's second-largest that year after Facebook. Analysts have recommended that investors accept Felda's unconditional voluntary takeover offer to privatise FGV, describing the RM1.30 per share cash offer as fair and attractive, with a clear exit opportunity for shareholders. The offer is also seen as a near-term floor for the stock, representing a premium of about 10 per cent over its one-year volume-weighted average price.
Malaysian Reserve
4 days ago
- Business
- Malaysian Reserve
FGV minority shareholders should agree to RM1.30
Investors face tough choice amid weak outlook, fair value bid by RUPINDER SINGH FGV Holdings Bhd is once again in the spotlight with the Federal Land Development Authority's (Felda) renewed attempt to privatise the plantation giant. This time, minority shareholders should seriously consider accepting the RM1.30 per share offer — not only because it reflects fair value under current market and operating conditions, but also because the company's long-term structural issues and volatile earnings profile offer little reason to hold on. Felda, which currently owns 86.93% of FGV shares through direct and indirect holdings, has launched an unconditional voluntary takeover offer to acquire the remaining shares it does not already own. If successful in securing at least 90% of the total share capital, Felda will trigger a compulsory acquisition under the Capital Markets and Services Act 2007 and proceed to delist the company from Bursa Malaysia. The offer, priced at RM1.30 per share, is the same level Felda offered back in 2020 during its first privatisation attempt. While that offer ultimately failed to reach the required threshold, several key dynamics have changed since then — making the current bid more likely to succeed and more compelling to minority shareholders. FGV was once a high-flying IPO story. When it listed on Bursa Malaysia in June 2012, it raised RM10.4 billion, with shares priced at RM4.55 apiece. With a total of 3.65 billion shares issued, the listing valued FGV at a staggering RM16.6 billion, making it the second-largest IPO globally that year after Facebook. The offering was hailed as a major milestone for Malaysia's palm oil industry and Felda's transformation ambitions. More than a decade later, that promise has largely faded. FGV's shares last closed at RM1.28 — more than 70% below its IPO price — reflecting chronic structural inefficiencies, volatile earnings, governance setbacks and missed downstream integration targets. For many long-time investors, the privatisation offer now represents a pragmatic way out of a disappointing investment. Felda's current move echoes its December 2020 attempt, when it triggered a mandatory general offer after acquiring shares from The Retirement Fund Inc (KWAP) and Urusharta Jemaah Sdn Bhd (UJSB). Despite several extensions to the offer period, the bid ultimately failed to reach the 90% acceptance level required for delisting. However, conditions at the moment are more favourable for Felda. Notably, in March 2025, Bursa Malaysia rejected FGV's application for additional time to rectify its low public shareholding, leaving the company in breach of listing requirements and giving Felda a firm rationale to relaunch its takeover effort. Public shareholding now stands below 13%, limiting trading liquidity. This raises the likelihood of offer acceptance, particularly as the remaining minority shareholders face a shrinking market with few institutional buyers. Both Hong Leong Investment Bank (HLIB) and BIMB Securities Sdn Bhd recommend acceptance. HLIB has revised its target price to RM1.30 from RM1.26, in line with Felda's offer. BIMB sees the offer as fair, noting it represents an 8.5% premium over its in-house fair value of RM1.20 and a 10% premium to the one-year volume weighted average price (VWAMP). At RM1.30 per share, the offer translates to a forward price-to-earnings (P/E) ratio of about 13.2 times–15 times for financial year 2025 (FY25)-FY27 and a price-to-book (P/B) multiple of 0.78 times — reasonable when compared to FGV's five-year historical average P/B of 0.9 times. Earnings outlook remains muted. FGV's core net profit is projected to decline from RM453.8 million in FY24 to RM346.2 million in FY25 and RM316.5 million in FY26. EBITDA margins are expected to range between 6.3% and 6.6%, reflecting persistent cost pressures and operational headwinds, particularly in the downstream segment. Dividend yields, while modest, are projected to fall to 1.6% in FY25 and FY26 based on HLIB's estimates. BIMB is slightly more optimistic, expecting yields closer to 4.2% based on higher dividend per share assumptions. Regardless, neither projection makes a strong case for upside from holding out. Felda's intention to gain full control of FGV is part of a broader strategy to consolidate its plantation-related assets and unlock operational synergies. By delisting FGV, Felda gains more flexibility to undertake structural reforms, reduce overlapping functions and implement its Settlers Development Programme (SDP) without the constraints of quarterly reporting and minority shareholder scrutiny. The SDP aims to modernise Felda's agricultural model and improve settler incomes through diversification and sustainability. Full ownership of FGV would allow Felda to better align the company's upstream and downstream assets with these long-term goals. It also provides the opportunity to address governance and cost issues that have long hampered FGV's performance — challenges that are difficult to tackle with fragmented public ownership. For investors considering rejecting the offer, the risks are real. Should Felda succeed in breaching the 90% threshold, dissenting shareholders will likely face a compulsory acquisition. If the threshold isn't met, liquidity will deteriorate further and the stock may trade in a tight band with limited institutional interest. The chance of a meaningful re-rating appears remote, particularly in the absence of strong palm oil price tailwinds or significant internal restructuring both of which are unlikely in the short term. FGV's privatisation may not deliver IPO-level returns, but it represents a realistic and fair exit for investors. The RM1.30 offer reflects current valuations and market sentiment while allowing Felda to execute its vision for agricultural reform and settler empowerment. From a capital markets standpoint, the delisting is now not only inevitable — it is necessary. Minority shareholders would be wise to take the offer and move on, closing a long and often difficult chapter in one of Malaysia's most watched listings. This article first appeared in The Malaysian Reserve weekly print edition
The Star
27-05-2025
- Business
- The Star
Felda's offer to take FGV private seen as fair
TA Researc said Felda's offer price of RM1.30 per share was 26% above its target price of RM1.03 per share for FGV. PETALING JAYA: The Federal Land Development Authority's (Felda) renewed takeover offer of FGV Holdings Bhd 's (FGV) remaining shares that it does not already own at RM1.30 per share has been deemed fair in terms of valuation and the prospects for FGV, analysts say. Research houses such as BIMB Research, Hong Leong Investment Bank Research (HLIB Research), TA Research and MIDF Research have advised FGV shareholders to accept the offer price. The latest takeover offer marks the second attempt by Felda to privatise FGV, following a similar offer made in 2020 that also proposed RM1.30 per share. Felda, together with persons acting in concert (PAC), including the state government of Pahang, now collectively control 86.93% of FGV's issued share capital. BIMB Research said in a report it believes the likelihood of the shareholding crossing the 90% threshold is high. 'While the offer premium is relatively modest, we believe it is sufficient to attract acceptance given FGV's subdued earnings outlook, prevailing plantation sector volatility and lack of foreseeable near-term re-rating catalysts,' said the research house. TA Research, meanwhile, said Felda's offer price of RM1.30 per share was 26% above its target price of RM1.03 per share for FGV. Based on FGV's forecast earnings for this year (FY25), the offer implies an acquisition at 15 times FY25's price-earnings ratio (PER). Notably, the offer is priced at a steep 71.4% discount to FGV's initial public offering price of RM4.55 per share in 2012. Since Felda's initial privatisation attempt in December 2020, FGV's share price has been volatile. It rose to RM1.46 in May 2021 after the first bid failed but steadily declined thereafter to RM1.13 by March 14, 2025, and RM1.01 by April 9, 2025, a 22% drop from the offer price. 'The current attempt would also be the second time investors are presented with an opportunity to realise the value of their investment through a cash offer,' TA Research said. Given the potential price risk post-general offer, TA Research has advised FGV minority shareholders to accept the offer. 'We also advise investors to switch to other undervalued plantation stocks with more compelling stories and potentially higher earnings growth,' said the research house. Similarly, HLIB Research also advised existing shareholders of FGV to accept the latest offer, as 'the offer price is higher than our sum-of-part derived target price of RM1.26'. The research house maintained its 'hold' rating on FGV with a revised target price of RM1.30 from RM1.26 earlier, based on Felda's latest offer. MIDF Research said in a note to clients that Felda's RM1.30 offer price represents a 12% premium over its fair value of RM1.16. Currently, the stock is valued at 16.7 times PER based on forecast for FY25 earnings per share of 7.60 sen, 8.6% below the integrated plantation sector average PER of 18.3 times. According to MIDF Research, the latest development reaffirms Felda's objective to fully privatise FGV and consolidate its ownership and strategic control over the group. Felda has clearly stated that it does not intend to maintain FGV's listing status upon completion of the offer. 'Should Felda and its PAC reach the 90% ownership threshold, Bursa Malaysia will suspend the trading of FGV shares within five market days, after which the delisting process will be initiated in accordance with Bursa's listing requirements,' it said. If successful, the privatisation is also expected to streamline Felda's operational oversight, align FGV's strategic direction with broader national interests and potentially unlock long-term value through improved efficiency and coordination across the group.
Free Malaysia Today
27-05-2025
- Business
- Free Malaysia Today
FGV shareholders should take Felda's offer, say analysts
The latest takeover offer marks Felda's second attempt to privatise FGV following a previous failed attempt in 2020. PETALING JAYA : Research houses are advising FGV Holdings Bhd (FGV) shareholders to accept the Federal Land Development Authority's (Felda) unconditional voluntary takeover offer at RM1.30 per share, stating it is a fair price. 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.
The Star
27-05-2025
- Business
- The Star
MIDF recommends investors to accept Felda's RM1.30 privatisation offer
KUALA LUMPUR: MIDF Amanah Investment Bank Bhd has recommended investors to accept Federal Land Development Authority's (Felda) offer to buy all remaining shares in FGV Holdings Bhd (FGV). In a note today, MIDF said the RM1.30 offer price represents a 12 per cent premium over its fair value estimate of RM1.16. "Notably, Felda and its persons acting in concert (PACs) collectively hold approximately 86.93 per cent of 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 per cent, which would allow Felda to delist FGV,' it said. MIDF said the stock is currently valued at 16.7 times price-to-earnings ratio (PER) based on the forecast financial year (FY) 2025 earnings per share of 7.6 sen, which is 8.6 per cent below the integrated plantation sector's average PER of 18.3 times. "If valuation were instead based on FY2024 earnings, the implied PER would be 17.2 times. Although the historical and forward implied PERs are notably below FGV's five-year average of 21.7 times and lag behind sector valuations, we view this as a fair benchmark given the company's mixed outlook,' it said. MIDF said the rationale for the takeover reaffirms Felda's objective to fully privatise FGV and consolidate its ownership and strategic control over the group. "Felda has clearly stated that it does not intend to maintain FGV's listing status upon completion of the offer. Should Felda and its PACs reach the 90 per cent ownership threshold, Bursa Malaysia will suspend trading of FGV shares within five market days, after which the delisting process will be initiated as per Bursa's listing requirements. "If successful, the privatisation is expected to streamline Felda's operational oversight, align FGV's strategic direction with broader national interests, and potentially unlock long-term value through improved efficiency and coordination across the group,' it added. - Bernama Trading ideas: Public Bank, U Mobile, Kerjaya, Samaiden, Titijaya, PeterLabs, Shin Yang, NexG, Globaltec, Maybank, AMMB, PetGas, Hume Cement
