KUALA LUMPUR (June 26): Kenanga Investment Bank Bhd, acting as the independent adviser for Federal Land Development Authority’s (Felda) RM1.30 a share offer to buy remaining shares in FGV Holdings Bhd (KL:FGV), has recommended that shareholders accept the offer.
In its independent advice circular released Thursday, Kenanga concluded that the offer is “not fair but reasonable”.
It said while the offer price represents a 28.96%–34.67% discount to FGV’s estimated fair value of RM1.83–RM1.99 per share (based on the sum-of-parts valuation method), it still reflects a premium to recent market prices, particularly over the past month. The stock was trading unchanged at RM1.30 earlier.
Kenanga cited several key reasons for recommending that shareholders accept Felda’s RM1.30 offer for FGV shares:
- Felda holds 87.53% of FGV, giving it control over shareholder decisions, including:
Ordinary resolutions (needs over 50% approval);
Special resolutions (needs at least 75% approval);
Felda only abstains from voting if there’s a conflict of interest.
- FGV has not met Bursa Malaysia’s public shareholding requirement (minimum 25%) since 2021.
As of Feb 19, 2025, public shareholding was only 13.09%.
Bursa Malaysia has given FGV until Sept 10, 2025 to fix this, or face penalties or suspension.
- Felda does not plan to maintain FGV’s listing status.
- Low trading liquidity: FGV’s monthly trading volume is just 1.47%, much lower than the FBM KLCI average of 5.89%, making it harder for minority shareholders to sell.
FGV’s non-interested directors agree with Kenanga’s view and also recommend that shareholders accept the offer to cash out their investment.
The offer remains open until Monday, July 7, 2025.
On May 26, Felda made a new attempt to privatise FGV at RM1.30 per share, the same price it failed to secure shares at in 2020.