KUALA LUMPUR, Dec 8 — The Federal Land Development Authority (Felda), which owns a 21.24 per cent stake in FGV Holdings Bhd, is increasing its stake in the company to 35.12 per cent and is proposing to take FGV private at RM1.30 a share.

Felda has entered into a conditional share purchase agreement with Kumpulan Wang Persaraan (Diperbadankan) to purchase 222.48 million FGV shares representing 6.1 per cent for RM289.2 million or RM1.30 per share.

In a statement today, Maybank Investment Bank Bhd (Maybank IB) said Felda has also entered into a share purchase agreement with Urusharta Jamaah Sdn Bhd to purchase 283.71 million FGV shares—representing 7.78 per cent equity interest in FGV — for RM368.8 million or RM1.30 per share.

Upon completion of the proposed acquisition, Felda, together with the persons acting in concert with it (PACs), will collectively hold more than 50 per cent of FGV shares.

"Upon the conditional share purchase agreements (CSPAs) becoming unconditional, Felda will serve the notice of mandatory offer to the FGV board of directors,” Maybank IB said.

The proposed acquisition represents an opportunity for Felda to obtain statutory control of FGV together with the PACs in order to pursue its transformation plan and to restructure Felda and its related companies to strengthen its core business in the plantation sector.

"The acquisition will enhance Felda’s ability to control the plantation land and integrated value-chain of FGV and its subsidiaries.

"This will pave the way for greater cooperation in the business activities of Felda and FGV Group and provide Felda access to high value-added downstream activities undertaken by FGV Group in the plantation sector,” Maybank IB said.

The acquisition is expected to contribute positively to the future earnings of Felda and create sustainable synergies with the enlarged Felda group, and this in turn will allow Felda to have sustainable cash flow to restore the performance and sustainability of Felda.

Maybank IB is the principal adviser to Felda for the proposals. — Bernama