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New Straits Times
3 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
5 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
New Straits Times
20-05-2025
- Business
- New Straits Times
RM10.4m fraud by civil servants uncovered at federal department
KUALA LUMPUR: Fraudulent transactions involving RM10.4 million by civil servants were uncovered at a federal department, said Accountant General Nor Yati Ahmad. She said investigations from 2019 to 2024 into public fund misappropriation had led to the recovery or detection of about RM18 million in losses. "From 2019 to 2024, based on the transactions we investigated involving losses of public funds, we have resolved and detected around RM18 million. "There was one case involving civil servants, amounting to RM10.4 million. It occurred at a federal department. Enforcement authorities have taken follow-up action," she said at a press conference after launching the Accounting Fraud Working Group here today. Present were Malaysian Anti-Corruption Commission Chief Commissioner (MACC) Tan Sri Azam Baki and Auditor General Datuk Wan Suraya Wan Mohd Radzi. Nor Yati said most accounting fraud cases involved manipulation of procedures and financial processes, including tampering with accounting and financial management systems. She said the department, aside from taking firm action based on third-party reports and other sources, is also taking a proactive approach by leveraging current digital technologies. This includes analysing financial data to detect red flags and identify unusual or suspicious transactions. "We are doing this now and will continue to do so. It is now part of our standard work processes at the National Accounting Department nationwide." Earlier in her speech at the event, Nor Yati said public sector agencies must adopt a collaborative approach to navigate an increasingly challenging and complex technological landscape. She said this could be achieved through cooperation and the sharing of best practices among public and private sector agencies to strengthen fraud prevention policies, regulations and methodologies. "The Madani government, which emphasises the principles of governance and integrity, stands to benefit significantly from the implementation of the Accounting Fraud Working Group. "The Accountant General's Department is fully committed to supporting and helping this group in achieving its objectives. We believe that through this strategic synergy, efforts to combat fraud can be carried out more effectively and comprehensively." The working group would be spearheaded by MACC and include the Auditor General's Department, Accountant General's Department, Inland Revenue Board, Malaysian Companies Commission, Universiti Teknologi Mara and the Malaysian Institute of Accountants.
Malaysiakini
19-05-2025
- Business
- Malaysiakini
AGD uncovers RM10m fraud at Malaysian govt office in London
The Accountant General's Department (AGD) has uncovered a case of financial fraud involving a Malaysian government office in London, resulting in losses amounting to RM10.4 million. Accountant-General Nor Yati Ahmad said the case, which involved public servants, is among several identified between 2019 and 2024, with total losses estimated at RM18 million. 'Enforcement action...
![News@9: Today's top headlines - May 20, 2025 [WATCH]](/_next/image?url=https%3A%2F%2Fassets.nst.com.my%2Fimages%2Farticles%2Fnews195_NSTfield_image_socialmedia.var_1747659792.jpg&w=3840&q=100)
New Straits Times
19-05-2025
- Politics
- New Straits Times
News@9: Today's top headlines - May 20, 2025 [WATCH]
Here are today's biggest stories. Traffic disruption Six highways and 25 major roads in the Klang Valley will be closed or diverted in stages this week for the 46th Asean Summit. Fraudulent transactions Accountant-General Nor Yati Ahmad said fraudulent transactions involving RM10.4 million by civil servants were uncovered at a federal department. Sidestepped Thailand Open champs Pearly Tan - M. Thinaah sidestepped questions about their contract status with the Badminton Association of Malaysia, choosing instead to focus on this week's Malaysia Masters. That's it for News@9.
