KUALA LUMPUR (Sept 4): WTK Holdings Bhd (KL:WTK) has proposed an all-cash deal to acquire plantation and palm oil mill businesses for a total of RM555 million from its major shareholder.
In a bourse filing on Thursday, the Sibu-based timber and plantation firm said it had entered into three separate conditional share sale agreements with WTK Realty Sdn Bhd for the acquisitions.
The first involves WTK acquiring a 100% stake in Desacorp Sdn Bhd, which manages an oil palm plantation in Mukah, for RM230 million.
Additionally, its wholly owned subsidiary, BioPalm Venture Sdn Bhd, will acquire a 70% stake in plantation company Imbok Enterprise Sdn Bhd for RM290 million, and a 70% stake in WTK Oil Mill Sdn Bhd, which operates and manages a palm oil mill, for RM35 million.
The acquisition will see the group’s planted area increase by more than 68% to 35,519 hectares from 21,130 hectares. At market close prior to the announcement, shares of WTK closed at 45.5 sen near their five-month high, following a near 10% rise from last week, valuing the group at RM214.55 million.
The proposed acquisitions are deemed related party transactions as WTK Realty holds 13.88% of WTK, and another 14.09% indirect stake. WTK Realty is in turn controlled by the Wong family, whose members also hold a direct stake in the listed entity.
WTK’s 6.28% shareholder, managing director and chief executive officer, Datuk Seri Patrick Wong Haw Yeong, and executive director Datin Seri Annie Wong Haw Bing — who also serve as director and alternate director of WTK Realty — are likewise considered interested parties.
The company intends to fund the purchases through a combination of internally generated funds and bank borrowings or sukuk financing. As of June 30 this year, its cash and bank balances stood at RM263.4 million, while total borrowings amounted to RM399.4 million.
WTK said the acquisitions align with the group’s strategy to expand its presence in Sarawak’s oil palm cultivation business, covering both upstream plantation activities and palm oil mill operations
The WTK Oil Mill acquisition will also integrate milling operations with the group’s plantations while reducing reliance on third-party mills, the group noted. WTK Oil Mill's oil and kernel extraction rates in 2024 were on a par with WTK's at more than 19% and 4% respectively.
Overall, WTK expects the acquisitions to boost revenue and earnings in the coming years and position the group to capitalise on growing global demand for palm oil.
The group added that the acquisitions are expected to be completed by the first quarter of 2026, pending approvals including from its non-interested shareholders.
Shares in WTK ended unchanged at 45.5 sen on Thursday, giving the group a market capitalisation of RM219 million.