KLK's Bid to Take Stake in Boustead Plantations Falls Through
By Ying Xian Wong
Malaysian palm-oil company Kuala Lumpur Kepong's plan to become a major shareholder in rival Boustead Plantations has collapsed, ending a deal that could have seen the latter privatized.
KLK, which had offered $243.1 million for a 33% stake in Boustead, said in a bourse filing late Wednesday that the companies had mutually agreed to terminate the deal.
It said the decision was taken after it was informed that one of the conditions of the deal wouldn't be met by the cut-off date of Oct. 6. The company didn't provide further details.
Shares in KLK declined as they resumed trading Thursday morning, falling 0.7% to MYR21.34. Trading in both companies' shares had been suspended for two days pending news of the deal. Boustead was unchanged at MYR1.27 after having ended 13% lower on Tuesday.
KLK had made the offer to acquire the stake in the plantation company from parent Boustead Holdings and major shareholder the Malaysia Armed Forces Fund Board in August. It offered a cash consideration of MYR1.15 billion, or MYR1.55 a share. That compares with the stock's closing price of MYR1.37 on Aug. 23, the day before the offer was made.
Had the deal gone through, KLK, Boustead Holdings and the armed forces fund board could have taken Boustead Plantations private.
As the agreement has collapsed, Boustead Holdings will need to repay a MYR229.15 million deposit to KLK, the palm-oil planter said in Wednesday's filing.
KLK said the termination of the deal won't have a material impact on earnings or net assets for the fiscal year 2024.
Write to Ying Xian Wong at yingxian.wong@wsj.com
(END) Dow Jones Newswires
October 04, 2023 21:55 ET (01:55 GMT)
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