UPDATE: Indofood Sukses Makmur offers to buy Indofood Agri, valuing palm oil play at around S$391M

Indonesian rupiah notesIndonesian rupiah notes

This article was originally published on Thursday, 11 April 2019 at 12:40 A.M. SGT; it has since been updated.

Indofood Sukses Makmur said late on Wednesday it offered to acquire the rest of Singapore-listed Indofood Agri it doesn’t already own for S$0.28 a share, in a deal valuing the company at around S$390.85 million.

That was based on the number of outstanding shares excluding treasury shares.

The Indonesia-listed company and related entities already hold around 1.04 billion of Indofood Agri’s shares, or an around 74.52 percent stake, it said in a filing to SGX late on Wednesday.

The offer price of S$0.28 a share is an around 21.5 percent premium to the volume weighted average price for the month through 5 April, which was the last day the shares were traded on SGX before Indofood Agri requested a trading halt.

“The offer presents shareholders with a clean cash exit opportunity to realize their entire investment in shares at a premium over the prevailing trading prices,” the filing said, noting that the trading volume of Indofood Agri’s shares has been low.

The offer is conditional on Indofood Sukses Makmur receiving acceptances of at least 90 percent of Indofood Agri’s outstanding shares, it said. Once the free float of the shares falls below 10 percent required minimum threshold, Indofood Sukses Makmur can compulsorily acquire the remaining shares.

Indofood Sukses Makmur said it plans to take the company private, delisting it from SGX, so that it can streamline the number of listed entities in its group structure. It added that it wants flexibility to implement strategic initiatives and operational changes.

In a separate filing, Indofood Agri said it would be appointing an independent financial adviser; it requested the trading halt on its shares be lifted at 9:00 A.M. SGT.

Indofood Sukses Makmur has operations across multiple stages of food manufacturing, from producing raw materials and processing them into consumer products, the filing said.

Indofood Sukses Makmur has four main business groups: consumer branded products, including noodles, dairy products, snack foods and seasonings; the Bogasari Group, which mainly produces wheat flour and pasta; the agribusiness group, which includes seed breeding, oil palm cultivation and producing cooking oils; and the distribution group, which distributes both its own consumer products and third-party products.

Indofood Agri primarily is involved with oil palm seed breeding, cultivating oil palm plantations, producing crude palm oil and marketing palm oil derivative products, the filing said, adding it also cultivates rubber and sugar cane.

 

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