IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<p><a href="https://www.smartkarma.com/entities/kuala-lumpur-kepong-bhd" target="_blank" data-smartkarma-citation="entities:17039:1" rel="noopener">Kuala Lumpur Kepong (KLK MK)</a> made an offer to acquire <a href="https://www.smartkarma.com/entities/ijm-corp-bhd" target="_blank" data-smartkarma-citation="entities:16784:1" rel="noopener">Ijm Corp Bhd (IJM MK)</a>/IJMC’s entire stake in <a href="https://www.smartkarma.com/entities/ijm-plantations-bhd" target="_blank" data-smartkarma-citation="entities:12967:1" rel="noopener">Ijm Plantations (IJMP MK)</a>/IJMP for RM3.10 per share in cash, subject to potential dividend adjustments. The offer price is a 26% premium to the unaffected price of RM2.46 per share (prior to the trading halt on 8 June).</p><p>IJMC is IJMP’s largest shareholder and owns 494.9 million shares, representing 56.2% of outstanding shares. The proposed acquisition implies a cost of RM1.53 billion ($371.7 million). KLK’s offer is subject to IJMC’s acceptance and execution of the definitive agreement (SPA) on or before 5.00 p.m. on 11 June 2021 or such a mutually extended date, failing which the offer will lapse. IJMC has stated that is agreeable to finalise the terms with KLK to meet the offer deadline. </p><p>IJMP is listed on the Main Markets of Bursa Malaysia. In Malaysia, the threshold for triggering a mandatory general offer (MGO) is the offeror and concert parties owning 33% or more of the voting shares. If the SPA becomes unconditional, KLK will be required to extend a mandatory general offer to acquire all the remaining IJMP shares for a cash offer price of RM3.10 per share, subject to potential dividend adjustments.  </p><div class="content-highlight"><p>A key condition precedent for the SPA is approval by both IJMC and KLK shareholders at their respective EGMs. We think that the deal should gain EGM approval as it is attractive to both IJMC and KLK shareholders. Overall, at the last close price, the downside risk is low (trading close to break price) with a good probability of upside (SPA becoming unconditional).  </p></div>

Kuala Lumpur Kepong (KLK MK) made an offer to acquire Ijm Corp Bhd (IJM MK)/IJMC’s entire stake in Ijm Plantations (IJMP MK)/IJMP for RM3.10 per share in cash, subject to potential dividend adjustments. The offer price is a 26% premium to the unaffected price of RM2.46 per share (prior to the trading halt on 8 June).IJMC is IJMP’s largest shareholder and owns 494.9 million shares, representing 56.2% of outstanding shares. The proposed acquisition implies a cost of RM1.53 billion ($371.7 million). KLK’s offer is subject to IJMC’s acceptance and execution of the definitive agreement (SPA) on or before 5.00 p.m. on 11 June 2021 or such a mutually extended date, failing which the offer will lapse. IJMC has stated that is agreeable to finalise the terms with KLK to meet the offer deadline. IJMP is listed on the Main Markets of Bursa Malaysia. In Malaysia, the threshold for triggering a mandatory general offer (MGO) is the offeror and concert parties owning 33% or more of the voting shares. If the SPA becomes unconditional, KLK will be required to extend a mandatory general offer to acquire all the remaining IJMP shares for a cash offer price of RM3.10 per share, subject to potential dividend adjustments.  A key condition precedent for the SPA is approval by both IJMC and KLK shareholders at their respective EGMs. We think that the deal should gain EGM approval as it is attractive to both IJMC and KLK shareholders. Overall, at the last close price, the downside risk is low (trading close to break price) with a good probability of upside (SPA becoming unconditional).  

IJM Plantations’ Potential MGO from Kuala Lumpur Kepong

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<p> The benchmark palm oil contract on the Malaysia Bursa closed at a record high of RM4,524/mt at the mid-day close the 12 May. The previous high was in March 2008. That gain in palm oil has moved in tandem with a rally in the vegetable oil complex, which has eked out the sharpest increase of all the agricultural commodities in the past year.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/206/666/original/image_83464541291621222454246.png?1621222454" class="editor-image img-responsive" data-smartkarma-image-id="206666"></figure>
<div style="text-align: left;" class="content-caption">Source: <a href="http://www.fao.org/faostat/en/#data/QD/metadata" target="_blank" rel="noopener">FAO</a>
</div>
<div style="text-align: left;" class="content-caption">Components of the vegetable oils price index: soybean oil, Dutch , fob ex-mill; sun oil, EU, fob NW Eur. port; rape oil, Dutch, fob ex-mill; groundnut oil, any origin, cif Rotterdam; cotton oil, US, PBSY, fob Gulf; coconut oil, Phil./Indo., cif Rotterdam; palmkernel oil, Mal./Indo., cif Rotterdam; palm oil crude, cif NW Eur. port; linseed oil, any origin, ex-tank, Rotterdam; castor oil, ex-tank Rotterdam.</div>
<p>The gain in palm oil prices is largely underpinned by concerns over slower-than-expected production growth in the key exporting countries (Malaysia and Indonesia), hampered by labour shortages, in conjunction with strong global import purchases.</p>
<p>Yet while palm oil has enjoyed a meteoric price rise, the performance of listed palm oil plays has bifurcated. </p>
<p>Is this rally sustainable and why are markets not moving more in sync?  Or is ESG becoming a more pressing issue? </p>
<p>More below the fold. </p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/206/657/original/image?1621220074" class="editor-image img-responsive" data-smartkarma-image-id="206657"></figure>

 The benchmark palm oil contract on the Malaysia Bursa closed at a record high of RM4,524/mt at the mid-day close the 12 May. The previous high was in March 2008. That gain in palm oil has moved in tandem with a rally in the vegetable oil complex, which has eked out the sharpest increase of all the agricultural commodities in the past year.

Source: FAO

Components of the vegetable oils price index: soybean oil, Dutch , fob ex-mill; sun oil, EU, fob NW Eur. port; rape oil, Dutch, fob ex-mill; groundnut oil, any origin, cif Rotterdam; cotton oil, US, PBSY, fob Gulf; coconut oil, Phil./Indo., cif Rotterdam; palmkernel oil, Mal./Indo., cif Rotterdam; palm oil crude, cif NW Eur. port; linseed oil, any origin, ex-tank, Rotterdam; castor oil, ex-tank Rotterdam.
The gain in palm oil prices is largely underpinned by concerns over slower-than-expected production growth in the key exporting countries (Malaysia and Indonesia), hampered by labour shortages, in conjunction with strong global import purchases.
Yet while palm oil has enjoyed a meteoric price rise, the performance of listed palm oil plays has bifurcated. 
Is this rally sustainable and why are markets not moving more in sync?  Or is ESG becoming a more pressing issue? 
More below the fold. 


Powering Palm Oil: Record Prices Amid Vegetable Oil Complex Rally

Last Week in Event SPACE: Kerry Logistics, Sanken Electric, Vocus Comms, Toa Oil, ThaiBev, Sharp

<div>
<p>Subsequent to contentious allegations over a land lease agreement (LLA), on the 8 December, government-backed FELDA announced a possible <a href="https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3112207" target="_blank" rel="noopener">mandatory takeover</a> (MTO) of <a href="https://www.smartkarma.com/entities/fgv-holdings-bhd" target="_blank" data-smartkarma-citation="entities:2200:1" rel="noopener">FGV Holdings Bhd (FGV MK)</a> at RM1.30/share, a 2.36% premium to last close. </p>
<p>FELDA, holding a 36.61% stake in FGV, additionally entered into conditional SPAs to buy the 6.10% and 7.78% stakes held by Kumpulan Wang Persaraan (Retirement Fund - a statutory body which manages the pension scheme for Malaysia's public employees) and Urusharta Jamaah (an investment holding company owned by the Ministry of Finance) for RM658mn.  Those SPAs were completed on the 22 December, <a href="https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3115981" target="_blank" rel="noopener">triggering</a> an unconditional MTO. This Offer was unconditional as FELDA held 50.49% when taking into account Parties Acting in Concert (PACs).</p>
<p>The Offer Document was despatched on the <a href="https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3120407" target="_blank" rel="noopener">12 January</a>, with the First Closing Date on the 2 February.</p>
<p>The Independent Advice Circular (IAC) has now been <a href="https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3123307" target="_blank" rel="noopener">despatched</a>. Not surprisingly, the independent advisor (RHB) considers the Offer is Not Fair, <em>but</em> Reasonable, and therefore recommends shareholders to accept the Offer.</p>
<p>Irrespective, this deal is done, and is currently trading at terms.  </p>
</div>
<div>
<p>More below the fold.</p>
</div>


Subsequent to contentious allegations over a land lease agreement (LLA), on the 8 December, government-backed FELDA announced a possible mandatory takeover (MTO) of FGV Holdings Bhd (FGV MK) at RM1.30/share, a 2.36% premium to last close. 
FELDA, holding a 36.61% stake in FGV, additionally entered into conditional SPAs to buy the 6.10% and 7.78% stakes held by Kumpulan Wang Persaraan (Retirement Fund - a statutory body which manages the pension scheme for Malaysia's public employees) and Urusharta Jamaah (an investment holding company owned by the Ministry of Finance) for RM658mn.  Those SPAs were completed on the 22 December, triggering an unconditional MTO. This Offer was unconditional as FELDA held 50.49% when taking into account Parties Acting in Concert (PACs).
The Offer Document was despatched on the 12 January, with the First Closing Date on the 2 February.
The Independent Advice Circular (IAC) has now been despatched. Not surprisingly, the independent advisor (RHB) considers the Offer is Not Fair, but Reasonable, and therefore recommends shareholders to accept the Offer.
Irrespective, this deal is done, and is currently trading at terms.  


More below the fold.


Last Week in Event SPACE: Shinsei Bank, Huifu Payment, Vedanta, Cardinal Resources, Jih Sun Finance

Malaysia

FGV Holdings Bhd is an agricultural and agri-commodities company. The Company owns and operates an oil palm plantation producing oil palm and rubber plantation products, soybean and canola products, oleochemial products and sugar products.

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FGV Holdings Bhd (FGV MK)

IJM Plantations’ Potential MGO from Kuala Lumpur Kepong

KLK MK made an offer to acquire IJMC’s entire stake in IJMP for RM3.10 per share in cash, subject to potential dividend adjustments. If the SPA...

Arun George

Powering Palm Oil: Record Prices Amid Vegetable Oil Complex Rally

The gain in palm oil prices is largely underpinned by concerns over slower-than-expected production growth, in conjunction with strong global...

David Blennerhassett

Last Week in Event SPACE: Kerry Logistics, Sanken Electric, Vocus Comms, Toa Oil, ThaiBev, Sharp

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

FGV (FGB MK): IFA Says Offer Not Fair

The Offer is opportunistic, however, the MTO is unconditional. Currently trading to terms - it was 2.4%/34.2% gross/annualised return, at the time...

David Blennerhassett

Last Week in Event SPACE: Shinsei Bank, Huifu Payment, Vedanta, Cardinal Resources, Jih Sun Finance

The weekend is upon us - pour yourself some coffee (or mulled wine) and sift through a brief summary of insights on various events discussed during...

David Blennerhassett

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