KUALA LUMPUR, May 9 — Agribusiness giant Louis Dreyfus was asked to be a cornerstone investor in Malaysian palm oil firm Felda Global Ventures Holding, which is preparing to sell shares in the world's second-largest IPO this year after Facebook, three sources with direct knowledge of the matter said.
Paris-based Louis Dreyfus, which built up a name in grains trading, has been expanding into palm oil in the last few years to tap rising demand for the commodity used in food and fuel.
Officials at FGVH, the commercial arm of Malaysia's Federal Land Development Authority (FELDA), invited Louis Dreyfus to take a 4.9 per cent stake in the firm ahead of the company's US$3 billion (RM9.2 billion) IPO in June, the sources said on Wednesday, declining to be identified because the information was confidential.
Based on the 4.65 ringgit-per-share offering announced by the government, the 4.9 per cent stake could be worth at least 800 million ringgit, according to Reuters calculations.
FGVH may announce the outcome of its discussions with Louis Dreyfus on the stake as early as Monday, one of the sources said.
Louis Dreyfus and FGVH officials were not immediately available for comment.
Privately-held Louis Dreyfus has separately agreed to be a strategic partner in the refining and logistics side of FGVH's palm oil business, according to the sources.
In 2009, Louis Dreyfus signed a joint venture deal with Singapore-listed Kencana Agri to build and operate a palm oil trading port in Indonesia's Kalimantan province in Borneo Island.
Louis Dreyfus recently set up a joint venture with a local company to acquire a greenfield palm oil concession in Indonesia.
The company is one of the world's four dominant agribusiness companies along with Archer Daniel Midland Co, Bunge and Cargill. — Reuters