Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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Following fractious 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. 
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FELDA, which held a 36.61% stake in FGV, had entered into conditional SPAs to buy the 6.1% and 7.78% stakes held by Kumpulan Wang Persaraan and Urusharta Jamaah for RM658mn.  Those SPAs have now completed and an unconditional MTO is <a href="https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3115981" target="_blank" rel="noopener">triggered</a>. It is unconditional as FELDA now holds 50.49% when taking into account parties acting in concert.
This deal is done. Expect shares to trade tight to terms. 
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More below the fold.
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Following fractious 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. 


FELDA, which held a 36.61% stake in FGV, had entered into conditional SPAs to buy the 6.1% and 7.78% stakes held by Kumpulan Wang Persaraan and Urusharta Jamaah for RM658mn.  Those SPAs have now completed and an unconditional MTO is triggered. It is unconditional as FELDA now holds 50.49% when taking into account parties acting in concert.
This deal is done. Expect shares to trade tight to terms. 


More below the fold.


Last Week in Event SPACE: Haier, Tokyo Dome, Cowell, Infratil, Link Admin, Sapporo/Asahi, Mcdonald's

On the 1 November 2011, <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> signed a Land Lease (LLA) Agreement with Federal Land Development Authority (FELDA), whereby 351,000 ha of FELDA’s land was leased to FGV for 99 years.
On the <a href="https://www.fgvholdings.com/press_release/official-statement-of-fgv-holdings-berhad-on-felda-land-lease-agreement/?pagen=2" target="_blank" rel="noopener">20 October</a> this year, FGV sought to clarify the LLA agreement following various ongoing news reports about the possible termination of the LLA.  FGV said FELDA had yet to contact FGV to negotiate matters regarding the LLA.
Under the terms of the agreement, termination of the LLA is allowed. However, it is understood FGV’s compensation would be assessed on the average profit/mature hectare for the entire leased land, multiplied by the loss of FGV’s future profits.
FGV currently manages 493,750 ha of land, therefore the LLA accounts for ~70% of FGV's plantation.
FGV followed up on the <a href="https://www.fgvholdings.com/press_release/official-statement-of-fgv-holdings-berhad-on-feldas-recovery-plan-termination-of-land-lease-agreement-lla/?pagen=1" target="_blank" rel="noopener">29 October</a> reiterating it had yet to receive a written notice from FELDA regarding the termination.
Led by Tan Sri Abdul Wahid Omar, who headed a special task-force - and who is also chairman of Bursa Malaysia - FELDA <a href="https://www.astroawani.com/berita-bisnes/felda-akan-ambil-tanah-dan-beli-kilang-dari-fgv-266002?fbclid=IwAR1M9Hmap92N5Tq_64AlsI-od2N1DZ6nOGOmKcooPzOLj-0chhwR_p0oMZo" target="_blank" rel="noopener">announced</a> on the 30 October the termination of the LLA. Two days prior, Datuk Sri Mustapa Mohamed - Minister in the Prime Minister Department for Economic Affairs - announced that the Cabinet had agreed to the recommendation (tabled by the task-force on the 14 October) to the termination of FELDA’s LLA with FGV.
<h3>The New News</h3>
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> of FGV at RM1.30/share. 
FELDA, which currently owns a 21.24% stake in FGV, entered into conditional sale and purchase agreements (SPAs) to buy the 6.1% and 7.78% stakes held by Kumpulan Wang Persaraan (Diperbadankan) and Urusharta Jamaah Sdn Bhd for RM658mn. Upon completion,  FELDA would hold 35.12%, which is above the 33% mandatory takeover offer threshold.
FELDA added that in conjunction with parties acting in converts (PACs), it would hold more than 50%. The names of these PACs were not made public. The conditions to the agreements are primarily one of funding and are expected to be completed within 3 months. 
FELDA intends to serve the mandatory offer notice on FGV once the SPAs have completed.
More below the fold.

On the 1 November 2011, FGV Holdings Bhd (FGV MK) signed a Land Lease (LLA) Agreement with Federal Land Development Authority (FELDA), whereby 351,000 ha of FELDA’s land was leased to FGV for 99 years.
On the 20 October this year, FGV sought to clarify the LLA agreement following various ongoing news reports about the possible termination of the LLA.  FGV said FELDA had yet to contact FGV to negotiate matters regarding the LLA.
Under the terms of the agreement, termination of the LLA is allowed. However, it is understood FGV’s compensation would be assessed on the average profit/mature hectare for the entire leased land, multiplied by the loss of FGV’s future profits.
FGV currently manages 493,750 ha of land, therefore the LLA accounts for ~70% of FGV's plantation.
FGV followed up on the 29 October reiterating it had yet to receive a written notice from FELDA regarding the termination.
Led by Tan Sri Abdul Wahid Omar, who headed a special task-force - and who is also chairman of Bursa Malaysia - FELDA announced on the 30 October the termination of the LLA. Two days prior, Datuk Sri Mustapa Mohamed - Minister in the Prime Minister Department for Economic Affairs - announced that the Cabinet had agreed to the recommendation (tabled by the task-force on the 14 October) to the termination of FELDA’s LLA with FGV.
The New News
FELDA announced a possible mandatory takeover of FGV at RM1.30/share. 
FELDA, which currently owns a 21.24% stake in FGV, entered into conditional sale and purchase agreements (SPAs) to buy the 6.1% and 7.78% stakes held by Kumpulan Wang Persaraan (Diperbadankan) and Urusharta Jamaah Sdn Bhd for RM658mn. Upon completion,  FELDA would hold 35.12%, which is above the 33% mandatory takeover offer threshold.
FELDA added that in conjunction with parties acting in converts (PACs), it would hold more than 50%. The names of these PACs were not made public. The conditions to the agreements are primarily one of funding and are expected to be completed within 3 months. 
FELDA intends to serve the mandatory offer notice on FGV once the SPAs have completed.
More below the fold.

Special Situations, Content Strategist, Smartkarma

Crispin Francis

Special Situations, Content Strategist

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

There has been recent news of a possible privatization for <a href="https://www.smartkarma.com/entities/2200" target="_blank" data-smartkarma-citation="entities:2200:1">Felda Global Ventures (FGV MK)</a>.FGV is now trading at a deep discount to its IPO price.FGV has clarified that there has been no discussion on a privatization at their Board Level.However, with the Malaysian Election coming up, this made us think a little deeper. What could be the rationale for a FGV privatization?

There has been recent news of a possible privatization for Felda Global Ventures (FGV MK).FGV is now trading at a deep discount to its IPO price.FGV has clarified that there has been no discussion on a privatization at their Board Level.However, with the Malaysian Election coming up, this made us think a little deeper. What could be the rationale for a FGV privatization? 

Felda (FGV MK):  Can a Privatization Help Tie up Loose Ends?

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

REAL-Economics.com

Equity Bottom-Up

The 173% premium reportedly being offered by FELDA Global Ventures (FGV) for a 37% stake in Eagle High Plantations has many hallmarks of the opaque financial developments prior to the May 2013 General Election in Malaysia. Political risk related to the transaction is extremely high, and investors need to exercise great caution when looking at the implications of this transaction. In 2013, 1MDB (1Malaysia Development Bhd.) raised about US$6bn through bond issues (carrying coupons of about 4%) for…

The 173% premium reportedly being offered by FELDA Global Ventures (FGV) for a 37% stake in Eagle High Plantations has many hallmarks of the opaque financial developments prior to the May 2013 General Election in Malaysia. Political risk related to the transaction is extremely high, and investors need to exercise great caution when looking at the implications of this transaction. In 2013, 1MDB (1Malaysia Development Bhd.) raised about US$6bn through bond issues (carrying coupons of about 4%) for…

Eagle High-FELDA Has Political Risk Stamped All over It

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)

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The 173% premium reportedly being offered by FELDA Global Ventures (FGV) for a 37% stake in Eagle High Plantations has many hallmarks of the opaque...

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