FGV announced that the company and the Rajawali Group are still in the midst of negotiating the terms of the definitive documentation and the signing of the definitive documents has been extended from no later than 31 Oct to no later than 30 November 2015. To recap, FGV announced on 12 June 2015 the proposed acquisitions of: (i) a 37% stake in PT Eagle High from the Rajawali Group for US$680m in cash (US$592.2m) and stocks (95m); and (ii) 95% stake in a sugar project from the Rajawali Group for RM249m). (Source: Bursa Malaysia)

Comments: Given the size of the proposed acquisitions, the second delay to finalise negotiations and sign definitive documents is not surprising. The announcement however does lower the chances that the proposed acquisitions might be called off in view of the weak Ringgit. We maintain our SELL rating for FGV with a target price of RM1.32 based on 12x 2016E EPS.

Source: Affin Hwang Capital Research - 2 Nov 2015