Indonesia’s largest plantation group PT Eagle High Plantations Tbk is reportedly offering up to 15 per cent discount to Felda Global Ventures Holdings Bhd (FGV) for the latter’s planned purchase of a stake in the group, sources told local press.
FGV had in November 2015 sought to secure a discount in the price of its 37 per cent stake purchase in the Indonesian planter, which it had proposed to acquire from Indonesian conglomerate Rajawali Group in June.
Instead of the 37 per cent stake, FGV could be taking a much smaller stake, with the larger stake being taken by the Felda’s main investment arm, Felda Investment Corp (FIC). Under this deal structure, FIC would remove a large portion of the risk from FGV, which is impacted weaker crude palm oil prices.
The FGV-Eagle High deal was originally priced at $631.5 million cash coupled with 95.44 million new FGV shares, representing 2.55 per cent of the enlarged and issued share capital of the group. FGV also plans to buy 95 per cent of a sugar project from Rajawali for $67 million.
The proposed deal was not well received by investors because of its lofty valuation and the impact on FGV’s balance sheet.
In early December, FGV had said that there might be “a different mode of investment” in Eagle High.