KUALA LUMPUR( May 27): Analysts have recommended that investors accept the unconditional voluntary takeover offer by the Federal Land Development Authority (Felda) to privatise FGV Holdings Bhd (KL:FGV).
The offer, priced at RM1.30 per share in cash, is seen as fair and attractive, providing a clear exit opportunity for shareholders.
BIMB Securities Research notes that this price represents approximately a 10% premium over the one-year volume weighted average market price (VWAMP).
Furthermore, it offers an 8.5% premium compared to BIMB Securities’ internal fair value assessment of RM1.20.
Both TA Securities and HLIB Research have also aligned their target prices with the RM1.30 offer price.
Analysts said the RM1.30 per share serves as a near-term floor price for FGV’s stock.
Full ownership is expected to enable Felda to streamline operational decision-making processes within FGV, accelerate ongoing turnaround efforts, and better integrate FGV’s upstream and downstream activities with Felda’s overarching development objectives.
This strategic alignment is a key benefit cited for the privatisation.
Additionally, the limited potential for upside if the offer does not succeed, and the possibility of the stock reverting to its pre-announcement trading levels, also contribute to the analysts’ advice to accept the offer. The certainty of a cash exit at a reasonable premium is presented as a compelling argument for shareholders.
“This second attempt would also be the 2nd 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 (KL:UMCCA) (TP: RM5.58),” said TA Securities.
As of May 20, 2025, Felda, along with its parties acting in concert (PACs), collectively held a substantial 86.93% stake in FGV.
The primary objective of this offer is for Felda to increase its ownership to beyond 90%, thereby facilitating the delisting of FGV from the Main Market of Bursa Malaysia. It is crucial for investors to note that the offer is scheduled to close on July 8, 2025, at 5:00pm, though this date remains subject to potential extensions.
This current attempt marks Felda’s second endeavour to privatise FGV, following a previous offer in 2020.
That earlier bid also proposed RM1.30 per share but ultimately failed to achieve the necessary 90% shareholder acceptance threshold for a mandatory compulsory acquisition.
However, analysts believe that the current offer has a higher probability of meeting the delisting threshold, largely due to Felda and its PACs already holding a significant stake.
FGV shares gained two sen or 1.6% at RM1.30 in early morning trade on Tuesday, valuing the group at RM4.74 billion.