Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<ul>
<li>Palm oil prices are up 177% since May 2020 and 66% since June of last year. Palm oil touched a record high of RM5,700/mt the 31 January.</li>
<li>Yet while palm oil has enjoyed a meteoric price rise, the performance of listed palm oil plays has bifurcated.  </li>
<li>Valuations appear largely constrained by environmental, social, and governance concerns, resulting in plantation stocks trading below their historical averages.</li>
</ul>


Palm oil prices are up 177% since May 2020 and 66% since June of last year. Palm oil touched a record high of RM5,700/mt the 31 January.
Yet while palm oil has enjoyed a meteoric price rise, the performance of listed palm oil plays has bifurcated.  
Valuations appear largely constrained by environmental, social, and governance concerns, resulting in plantation stocks trading below their historical averages.


CPO Plays Lag Palm Oil Prices As ESG Issues Weigh

Event-Driven

<ul>
<li>On the 24 August, <strong><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></strong> entered an agreement with Boustead Holdings (BHB), <strong><a href="https://www.smartkarma.com/entities/boustead-plantations-bhd" target="_blank" data-smartkarma-citation="entities:11418:1" rel="noopener">Boustead Plantations (BPLANT MK)</a></strong>'s largest shareholder, to acquire a 33% plus 1 share stake.</li>
<li>Upon the completion of the agreement, KLK - together with BHB and LTAT - would make a Mandatory Offer for BPlant. The Offer Price would be RM1.55/share, a lifetime high</li>
<li>It all looked pretty straightforward. However the BHB/LTAT agreement has twice been delayed. This <em>may </em>still get done. But there remain a number of political kinks to be ironed out. </li>
</ul>


On the 24 August, Kuala Lumpur Kepong (KLK MK) entered an agreement with Boustead Holdings (BHB), Boustead Plantations (BPLANT MK)'s largest shareholder, to acquire a 33% plus 1 share stake.
Upon the completion of the agreement, KLK - together with BHB and LTAT - would make a Mandatory Offer for BPlant. The Offer Price would be RM1.55/share, a lifetime high
It all looked pretty straightforward. However the BHB/LTAT agreement has twice been delayed. This may still get done. But there remain a number of political kinks to be ironed out. 


BPlant/KLK: This Is Getting (Even More) Political

<ul>
<li>Palm oil play <strong><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></strong> has entered an agreement with Boustead Holdings, <strong><a href="https://www.smartkarma.com/entities/boustead-plantations-bhd" target="_blank" data-smartkarma-citation="entities:11418:1" rel="noopener">Boustead Plantations (BPLANT MK)</a></strong>'s largest shareholder, to acquire a 33% plus 1 share stake.</li>
<li>Upon the completion of the agreement, KLK will make a Mandatory Offer for all shares not owned in BPlant. The Offer Price is RM1.55/share, a lifetime high. </li>
<li>The agreement conditions are rudimentary. The MGO has no minimum acceptance condition. This is done.</li>
</ul>


Palm oil play Kuala Lumpur Kepong (KLK MK) has entered an agreement with Boustead Holdings, Boustead Plantations (BPLANT MK)'s largest shareholder, to acquire a 33% plus 1 share stake.
Upon the completion of the agreement, KLK will make a Mandatory Offer for all shares not owned in BPlant. The Offer Price is RM1.55/share, a lifetime high. 
The agreement conditions are rudimentary. The MGO has no minimum acceptance condition. This is done.


Boustead Plantations' Lifetime High Offer Price

Last Week in Event SPACE: Singapore Air, Evergrande/Hopson, HomeCo/Aventus, Irongate, Shinsei Bank

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<p>This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.</p>
</div>
<div>
<p>I number 46, mostly firm, deals around the region.</p>
</div>
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<p>More below the fold.</p>
</div>


This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.


I number 46, mostly firm, deals around the region.


More below the fold.


Asia-Pac Weekly Risk Arb Summary: Shinsei Bank, HomeCo/Aventus, Irongate, Spark Infra, ICar, Yorkey

Malaysia

IJM Plantations Berhad is an investment holding company. The Company, through its subsidiaries, cultivates oil palm and milling.

Ijm Plantations (IJMP MK)

CPO Plays Lag Palm Oil Prices As ESG Issues Weigh

KLK's reliance on its downstream operations should help reduce palm product prices. The recent acquisition of IJM also extends the age profile of...

David Blennerhassett

BPlant/KLK: This Is Getting (Even More) Political

Only in Malaysia. One day after the KLK proposal was scuppered, LTAT, who is supposed to be cash-strapped, is proposing to make an Offer for BPLANT...

David Blennerhassett

Boustead Plantations' Lifetime High Offer Price

Both the SCA and the MGO are a lock. This could all be over very quickly. Assuming a conservative three-month timeframe to completion, this is...

David Blennerhassett

Last Week in Event SPACE: Singapore Air, Evergrande/Hopson, HomeCo/Aventus, Irongate, Shinsei Bank

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

Asia-Pac Weekly Risk Arb Summary: Shinsei Bank, HomeCo/Aventus, Irongate, Spark Infra, ICar, Yorkey

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett