BPlant saw its share price rise in robust trading to reach an intraday high of RM1.51 at 10.25am, the highest it has reached since Sept 24, 2018.
It closed the day at RM1.49 for a 12 sen or 8.76% premium over Wednesday’s closing price of RM1.37, giving it a market capitalisation of RM3.34 billion.
It had begun the day at RM1.50.
Trading on BPlant shares was halted yesterday pending an announcement on KLK’s acquisition plan.
About 115 million shares changed hands today, compared with 34.46 million shares traded on Wednesday.
KLK said yesterday that it was acquiring a stake of 33% plus one share in BPlant for a cash consideration of RM1.15 billion, or RM1.55 a share, valuing BPlant at RM3.47 billion.
KLK is also extending a mandatory general offer (MGO) to other shareholders.
Maybank Investment Bank said the offer price of RM1.55 was a record high for the plantation giant. The counter had been trading in the range of 23.5 sen to RM1.37 since its listing in 2014.
It said in its notes today that the 13% premium on the offer price had prompted it to raise its “hold” call on BPlant to “buy” to capitalise on the offer.
“We advise existing shareholders to hold on and take up the cash offer,” it added.
Maybank Invest has also revised its net asset value-based target price (TP) to RM1.55 from 92 sen previously.
MIDF Research said KLK’s proposition was in line with its longstanding strategy to bolster its involvement in the upstream sector.
“The proposed acquisition will bring KLK’s plantation land bank in the country up to about 189,070ha,” MIDF said.
It said this would increase KLK’s crude palm oil production by almost 800,000 tonnes, thereby raising the group’s profitability and shareholder value moving forward.
It added that the proposed deal would translate into an enterprise value (EV) of about RM55,009 per hectare for the planted 72,291 ha.
Public Investment Bank Bhd said the RM1.55 offer price was reasonable at an EV of RM56,009 per hectare.
It described this as “attractive” given BPlant’s substantial landbank, some of which have the potential for property development given their strategic location.
However, Public Investment Bank said the deal might not help to raise earnings in the near term given that there would be a 5% to 6% dilution in the group’s earnings per share.
The acquisition is expected to be concluded by the fourth quarter of 2023.