Home > Uncategorized > Sime Darby makes RM5.63 billion offer for NBPOL

Sime Darby makes RM5.63 billion offer for NBPOL

KUALA LUMPUR: Sime Darby Bhd is finally able to make a RM5.63 billion offer for New Britain Palm Oil Ltd’s (NBPOL) hand in marriage, now that the Papua New Guinea (PNG) government has wholeheartedly given its blessing.

Sime Darby yesterday launched a general offer to buy all shares in NBPOL at £7.15 (or RM37.52) each. This was less than two weeks after it had turned down the chance to buy Kulim (Malaysia) Bhd’s 49 per cent stake in London-listed NBPOL.

The cash offer is a 30 per cent premium over Kulim’s previous offer of £5.50 a share to increase its stake in NBPOL.

“This acquisition is conditional upon Sime Darby obtaining 51 per cent voting rights in NBPOL,” said Sime Darby president and group chief executive Tan Sri Bakke Salleh, here, yesterday.

He explained that “right from the start, Sime Darby was not only focusing on Kulim’s block in NBPOL because ideally, we would like to end up with at least a 51 per cent stake so that we can assume both NBPOL’s management and board control.”

“In the course of our negotiations with the stakeholders, we realised the key factor here is to get the support from the PNG Government. Right till the last day of our exclusivity agreement with Kulim, which fell on September 28, we still had not received any written letter of confirmation from the PNG Government.”

However, on October 1, Sime Darby finally obtained the support letter from PNG’s Prime Minister Peter O’Neill, which paved the way for it to reactivate its proposed offer for NBPOL. O’Neill emphasised that this deal must be in line with PNG’s national interest in relation to Rule 27A of the PNG Takeovers Code.

“It is not often that an opportunity such as this presents itself. The strategic fit between NBPOL and Sime Darby Plantation is the key factor that will ensure the success of this deal. We hope to complete this deal by year-end,” Bakke told reporters in a briefing.

He then dished out NBPOL’s vital statistics to support Sime Darby’s offer. Among them is ownership of about 80,000ha of oil palm plantations, more than 7,700ha of sugar cane land and a further 9,300ha of grazing pasture in PNG. NBPOL also owns 12 mills and two refineries — one in Port Moresby, PNG, the other in Liverpool, the United Kingdom.

Post-acquisition, the combined landbank of the two companies would be nearly a million hectares, he said, adding Sime Darby shareholders can look forward to around five per cent contribution to the bottom line in the next couple of years, if the merger with NBPOL is a success.

Bakke also said there are plans to delist NBPOL from the London Stock Exchange (LSE). “The stock is illiquid and its current market price is not reflective of the value of the company. In the last 12 months, the average cumulative trading volume on the LSE and the Port Moresby Stock Exchange represents less than 1 per cent of the float.

“We believe it will be good to move NBPOL’s listing from London to this part of the world, either to Bursa Malaysia or the Singapore Stock Exchange,” he said. 

Last night, NBPOL’s largest shareholder, Kulim, told the stock exchange yesterday it intends to accept Sime Darby’s proposal, provided there is no higher offer. It will soon call for a shareholders’ meeting to decide on this. If the deal goes through, Kulim will gain RM2.75 billion from the disposal.

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