According to the group president and chief executive officer of FGV, the due diligence (DD) exercise on PT Eagle High Plantations Tbk is on track and would likely be completed by the end of this month. The DD exercise will be followed by a definitive agreement as well as approvals from the shareholders and the respective regulatory authorities. (Source: StarBiz)

Comments: Subject to any potential changes in terms and conditions after the DD exercise, we expect the PT Eagle High acquisition to dilute FGV’s EPS by 8.3% in 2016E and possibly, EPS neutral to dilutive in 2017E. As such, our current target price of RM1.90 for FGV is likely to be revised lower upon a decision to complete the acquisition. Sentiments towards the stock has also been affected by the high acquisition price, potential rise in gearing and lack of management control. We maintain our HOLD rating at current stock price of RM1.68.

Source: Affin Hwang Capital Research - 5 Aug 2015