(Adds FGV statement, Felda response)
KUALA LUMPUR, March 16 (Reuters) - Shares in Malaysia’s FGV Holdings Bhd closed almost 21% higher on Tuesday after state-owned Felda failed in its bid to take the world’s largest crude palm oil producer private.
The Federal Land Development Authority, or Felda, in December proposed a mandatory takeover offer after agreeing to increase its stake in FGV.
Felda only obtained 81% equity interest in FGV by Monday evening when the offer deadline to take the company private ended, an exchange filing showed.
Felda planned to take FGV private, which required it and parties acting in concert to hold at least 90% of FGV shares following the takeover offer, Felda’s offer document in January showed.
FGV’s stock jumped as much as 28.5% on Tuesday in its largest intraday jump since Sept. 14, 2015.
After the takeover bid, FGV said in a bourse filing that its public shareholding spread fell below the required 25% under local regulations.
FGV has sought an extension from the securities regulator to “rectify the shortfall and to allow sufficient time for (Felda) to formulate a firm plan on FGV’s listing status”, it said.
“FGV remains as a public listed company and will make further announcements if there are any developments in respect of this matter,” the company said in an emailed response to Reuters.
Felda chairman Idris Jusoh said in a statement that the collaboration between Felda and FGV will form a synergy that will benefit both organisations.
“This would enable the management of FGV’s land lease agreement estates and oil palm mills to be integrated with other Felda estates, making them more effective and efficient for the benefit of Felda and FGV,” he said.
FGV’s independent directors in January urged investors to reject the takeover bid, saying the offer price of 1.30 ringgit ($0.3161) was unfair.
Independent adviser RHB Investment Bank had also called the offer price, representing an 8.5-18.8% discount to FGV’s fair value, unfair, but deemed the deal reasonable.
MIDF Research said the takeover attempt could have fallen through because of the unattractive offer price.
“With the current crude palm oil price... at an all-time high, minority shareholders might have been seeking a higher valuation,” it said in a note, referring to benchmark palm oil futures, that breached 4,000 ringgit per tonne.
FGV listed on the Kuala Lumpur Stock Exchange in 2012 as an investor favourite at an offer price of 4.55 ringgit ($1.13) per share in what was hailed as the world’s second largest initial public offer after Facebook.
But shares have since tumbled as the company grappled with financial and governance issues.
$1 = 4.1130 ringgit Reporting by Mei Mei Chu and Liz Lee; editing by Rashmi Aich and Ed Osmond