KUALA LUMPUR (Dec 11): Independent advisor Malacca Securities said the takeover offer price of RM1.55 for Boustead Plantation Bhd (BPlant) by Lembaga Tabung Angkatan Tentera (LTAT) is “not fair” but “reasonable” and recommended that shareholders accept the offer.

Malacca Securities said while the offer price represents a deep discount of RM1.05 or 40.4% to the planter’s real net asset value (RNAV) of RM2.60, it also gives an exit opportunity to investors.

“...We are of the view that the offer is reasonable, as it provides an exit opportunity to the (share)holders (especially for those holding a significant number of the BPlant shares) to realise their investment in the offer shares in cash…,” it said in a circular to shareholders on Monday.

Malacca Securities said its recommendation took into account the historical traded price of BPlant shares since its listing on the Main Market of Bursa Securities on June 26, 2014 up to Nov 10, 2023.

Malacca Securities noted that since BPlant’s listing up to the date of the notice, BPlant shares have traded between 20 sen (March 27, 2020) and RM1.5400 (Nov 10, 2023).

“From Nov 11, 2023 up until the LPD (latest practicable date), BPlant shares had traded at or below the offer price,” it added.

Additionally, the independent advisor said from June 17, 2022 to June 16, 2023, BPlant shares fluctuated between 60 sen and 90.5 sen.

It said the offer price indicates a premium between 66 sen and 81.22 sen per BPlant share, compared to the closing market price as of June 16, 2023 — being the last trading date prior to The Edge’s news report on June 19, 2023.

“In assessing the reasonableness of the offer, we are of the view that (share)holders should take particular note of BPlant share prices prior to June 19, 2023, as BPlant share prices thereafter may have been influenced by the news report, the SCA, the possible offer and the current offer,” it said. Notably, the SCA or strategic collaboration agreement, signed in August this year between LTAT, BPlant and Kuala Lumpur Kepong Bhd (KLK) fell through in October.

“There can be no assurance that the trading volume of BPlant shares after the close of the offer may continue at this level. If (share)holders decide not to accept the offer, (share)holders should note that they may not be able to readily realise their investment in BPlant in the open market at current prices, especially if the quantum of BPlant shares held by such (share)holders are sizeable,” added the firm.

Given that LTAT and the parties acting in concert (PACs) hold the majority stake of approximately 68.17% in BPlant shares as at the LPD, any alternative proposal will not be successful unless with their support, said Malacca Securities.

“As such, we are of the opinion that the offer is not fair but reasonable. Accordingly, Malacca Securities recommends that (share)holders accept the offer,” it added.

The non-interested directors of BPlant concur with the recommendation of Malacca Securities that the terms of the offer are not fair but reasonable. Accordingly, the non-interested directors recommend that shareholders accept the offer.

Read also:
Boustead Plantations receives unconditional takeover offer from LTAT at RM1.55 per share
LTAT’s BPlant stake sale to KLK falls through, Boustead must return RM229m deposit