Klk Acquires 36 Stake In Bplant From Open Market

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On Aug 24, KLK inked a deal with LTAT and BHB to acquire 33% of BPlant, or 739.19 million shares, for RM1.15 billion in cash. (KLK pic)PETALING JAYA: Plantation group Kuala Lumpur Kepong Bhd (KLK) has acquired a 36.09% equity interest in Boustead Plantations Bhd (BPlant) via a series of open market share acquisitions last Friday.
This was confirmed in a number of bourse filings by BPlant today which revealed KLK has acquired a direct equity interest of 3.09% or 69.29 million shares, and a deemed interest of 33% or 739.19 million shares, giving it a total stake of 36.09% or 808.49 million shares.
The shares were acquired by various companies and individuals linked to KLK including CEO Lee Oi Hian and his brother Lee Hau Hian, who is a non-independent non-executive director of KLK.
A back-of-the-envelope calculation based on last Friday’s closing price of RM1.46 suggests that KLK could have paid approximately RM1.18 billion for the stake.
However, the filings did not identify the identities of any of the sellers.
BPlant is controlled by the Armed Forces Fund Board (LTAT) and its wholly owned subsidiary Boustead Holdings Bhd (BHB) for a combined 68% share in the plantation company. BHB holds a 57.42% stake while LTAT holds 10.59%.
Trading in KLK and BPlant stocks was halted today, as per BPlant’s request to Bursa Malaysia this morning, pending a material announcement.
On Aug 24, KLK entered into a three-party strategic collaboration agreement (SCA) with LTAT and BHB to initiate a compulsory takeover bid to acquire shares of BPlant at RM1.55 per share, valuing BPlant at RM3.47 billion.
Under the terms of the agreement, KLK will acquire 739.2 million shares, equivalent to a 33% stake plus one share in BPlant, for a cash payment of RM1.15 billion.
The deadline for completion of the SCA was extended twice, initially from Sept 11 to Sept 22, and subsequently to Oct 6.
Deal still pending
Meanwhile, in response to a query today by Bursa, BPlant said it was informed by LTAT and BHB that the proposed acquisition of the 33% stake in BPlant is “pending a final decision between the transacting parties”.
It also affirmed that the cut-off date to finalise the agreement is this Friday (Oct 6), it said in a filing today.
BPlant had been queried by the exchange regulator to confirm or deny whether the acquisition had fallen through after a business publication reported that KLK’s acquisition of the 33% stake had been scrapped after two deadline extensions for the cut-off date.
Referring to the article, the plantation group also commented on a quote in the article by Prime Minister Anwar Ibrahim on the government’s intention to “help LTAT avoid losses”.
“The board wishes to clarify that (BPlant) had no advance notice of, and there was no confirmation of the government’s intention,” it added.
Politicians cry foul
The proposed deal has been shrouded in controversy since it was announced. Opposition members of Parliament (MPs) have raised concerns about the government’s approval for KLK to purchase the 33% stake, arguing the deal may adversely affect Bumiputera interests.
PAS MP for Pendang Awang Solahuddin Hashim described BHB and LTAT’s decision in divesting part of their stakes to KLK as “dangerous.”
Similarly, Bersatu MP Wan Ahmad Fayhsal Wan Ahmad Kamal urged the government to explain the rationale for the proposed disposal to KLK.
“Why wasn’t it (the stake) sold to Sime Darby, which is under Permodalan Nasional Bhd (PNB), if the government genuinely aims to achieve the goals of the 12th Malaysia Plan to enhance Bumiputera equity?” the Machang MP asked.
Today, Wan Fayhsal urged the government to explain if the plan to sell the stake to KLK has failed. He also asked whether the government has investigated the reasons behind BHB’s financial troubles, and if any action was taken against those responsible.
BPlant’s shares closed at RM1.27 prior to its suspension, valuing the group at RM2.8 billion while KLK was at RM21.48, giving it a market capitalisation of RM23.22 billion. - FMT

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