PETALING JAYA: The Armed Forces Fund Board (LTAT) has issued a notice of unconditional mandatory takeover offer for all the remaining shares not held by the fund in Boustead Plantations Bhd (BPlant) for RM1.55 apiece.
In a press statement today, LTAT said it was obliged to extend the offer after signing an unconditional share sale agreement (SSA) with Boustead Holdings Bhd (BHB), its wholly owned subsidiary.
Under the SSA, LTAT has agreed to acquire 739.2 million BPlant shares held by BHB, representing approximately 33% of the plantation group’s total issued shares. This transaction would increase the fund’s shareholding in BPlant from 10.59% to 43.59%.
Pursuant to the Capital Markets and Services Act 2007 and Securities Commission regulations, LTAT was then obliged to extend an unconditional mandatory takeover offer to acquire all the remaining 56.51% interest in BPlant.
Prior to the SSA, LTAT held a direct 10.59% stake in BPlant while BHB owned 57.42% of the plantation company.
LTAT said the takeover offer represents a significant step in BHB’s overall restructuring and turnaround strategy. It also enables the fund to rebalance its investment portfolio and improve its risk return profile.
“The offer also provides LTAT greater flexibility in setting the strategic direction of BPlant and accelerates the value creation plans that meet the objectives of LTAT,” the statement read.
“LTAT remains steadfast in enhancing its asset quality to provide sustainable returns to its contributors, in line with the LTAT Strategic Plan 2023-2025,” it added.
On Oct 9, the finance ministry had agreed to provide a government guarantee for LTAT to fork out a RM2 billion loan to undertake the privatisation of BPlant at RM1.55 per share.
Earlier, in August, LTAT and BHB had entered into an agreement with Kuala Lumpur Kepong Bhd (KLK) to initiate a compulsory takeover bid to acquire BPlant shares at RM1.55 per share, valuing BPlant at RM3.47 billion.
Under the terms of the agreement, KLK was to acquire 739.2 million shares or a 33% stake plus one share in BPlant, for a cash payment of RM1.15 billion.
However, the deal was aborted on Oct 4.
For the financial quarter ended June 30, 2023, (Q2 FY2023), BPlant suffered a net loss of RM5.5 million, declining 108% from a net profit of RM73.2 million in Q2 FY2022.
Meanwhile, revenue dropped 42% year-on-year to RM201.2 million from RM349 million.
As at 12.29pm, BPlant’s share price was up by four sen (2.74%) at RM1.50, giving it a market capitalisation of RM3.36 billion.