KUALA LUMPUR (Oct 2): Shares in Boustead Plantations Bhd (BPlant) fell as much as 27 sen or 18.49% in the morning session on Monday, ahead of the second cut-off date of Oct 6 for the proposed acquisition of the Armed Forces Fund Board (LTAT)-owned plantation group by Kuala Lumpur Kepong Bhd (KLK).
BPlant was among the top active counters on Bursa Malaysia, with 28.82 million shares traded in the morning session. The counter settled at RM1.22 at the noon market break, still down 24 sen or 16.44% from its close at RM1.46 last Friday, giving it a market capitalisation of RM2.73 billion.
Following the steep decline, Bursa suspended proprietary day trading (PDT) and intraday short selling (IDSS) of BPlant shares for the rest of Monday. KLK shares, meanwhile, stood unchanged at RM21.40 per share at the noon break.
The sell-off sparked concerns that KLK’s acquisition of the plantation group could be facing hurdles. Both KLK and LTAT declined to comment, when contacted.
KLK first announced on Aug 24 that it plans to acquire a 33% stake in BPlant from LTAT and Boustead Holdings Bhd for RM1.15 billion or RM1.55 per share, and will extend a mandatory general offer with plans to increase its stake to 65%.
LTAT and Boustead, meanwhile, will own the remaining 35%, and BPlant will be taken private.
The cut-off date of the proposal was first extended to Sept 22, from the original Sept 11 deadline. It was then extended again for another two weeks to Oct 6.
The deal has been in the spotlight, as opposition leaders claimed that the deal does not fit with the government’s aim of achieving the Bumiputera corporate equity target of 30% by 2025 as underlined in the 12th Malaysia Plan.
In response, Defence Minister Datuk Seri Mohamad Hasan said that LTAT had invited 15 plantation-linked companies for the competitive bidding process, including Sime Darby Plantation Bhd, Lembaga Tabung Haji, Tradewinds Corp and FGV Holdings Bhd.
Tradewinds, controlled by tycoon Tan Sri Syed Mokhtar Albukhary, was the only Bumiputera company out of five that submitted a bid. However, its bid was too low, Mohamad Hasan told the Dewan Rakyat on Sept 18.
“Boustead as a company opted for the higher bid [from KLK] because they need RM800 million by year end, and another RM1.7 billion to redeem their Islamic medium-term notes,” he added.