KUALA LUMPUR: Kuala Lumpur Kepong Bhd's (KLK)'s takeover offer is a good deal for Boustead Plantations Bhd's shareholders, analysts said.
Urging BPlant minority shareholders to cash out and take up the offer, Maybank Investment Bank Bhd analyst Chee Ting Ong said at an offer price of RM1.55 per share, it is a record high for the stock.
BPlant stock has been traded in the range of 23.5 sen to RM1.37 since its initial public offering in 2014.
"At the offer price, BPlant is valued at one time real net asset value, 1.2x financial year 2022 price to book value or implied enterprise value per hectare of RM56,000 per hectare.
"In terms of price earnings ratio (PER), BPlant is valued at 66x forward (core) PER. In sum, we believe the offer presents a good deal for minority shareholders.
"We advice existing shareholders to hold on and take up the cash offer," Chee said in a report today.
Public Investment Bank Bhd (PublicInvest) said based on BPlant's enterprise value (EV) of RM56,009 per hectare, the purchase price is considered as attractive.
This is due to BPlant's vast landbank, on top of its locations in strategic areas which are poised for property development.
PublicInvest said after consolidating the acquired assets, KLK's total landbank will round up to 452,884 hectares with a total oil palm planted area of 361,334 hectares.
Of this, KLK's Malaysian planted area will expand from 117,186 hectares to 189,477 hectares.
"Total FFB production is expected to increase by 17 per cent to 5.9 million tonnes," it said.
KLK announced on Thursday that it was buying a 33 per cent stake in BPlant for RM1.15 billion cash or RM1.55 per share from Boustead Holdings Bhd, a 98-per cent subsidiary of Lembaga Tabung Angkatan Tentera (LTAT).
Boustead and LTAT collectively own 68 per cent of BPlant prior to the sale.
Boustead and LTAT will be joint offerors with KLK, and will be obliged to extend a mandatory take-over offer to acquire all remaining BPlant shares not already owned by them at a cash offer price of RM1.55.
The offer is conditional on the approvals of Boustead shareholders and relevant authorities, and targeted for completion by the fourth quarter of 2024.
