Other investors nab French firm’s 2.5pc stake in FGVH
KUALA LUMPUR, June 21 — Other investors have leapt at the chance to snag the 2.5 per cent stake in FELDA Global ventures Holdings (FGVH) previously offered to French giant Louis Dreyfus Commodities Asia, a week before it makes its market debut, a local business paper reported today.
The Edge Financial Daily also reported that the French agri-business firm is still keen to acquire a small stake in the world’s No. 3 largest palm oil operator despite missing the June 13 deadline to confirm its institutional offering.
Citing a business executive familiar with Malaysia’s biggest initial public offering (IPO) this year, the paper reported that the reason Louis Dreyfus had hesitated was because the French company and FGVH had yet to agree on the terms for the supply of crude palm oil.
“The talks have been prolonged as Louis Dreyfus wanted the partnership agreement to be interconditional with the strategic stake. However, the talks could not be wrapped up by the closing date, and FGVH moved forward by placing out the 2.5 per cent stake,” The Edge quoted the unnamed executive as saying.
He was reported adding that FGVH had only inked a memorandum of understanding and not a real deal with Louis Dreyfus to take up the 2.5 per cent stake, which was how Malaysia’s commodities giant could offer it to the other cornerstone investors when it was the French firm failed to pick it up.
Reuters has also reported FGVH president Datuk Sabri Ahmad saying yesterday: “Talks on strategic venture partnership between FELDA Global and Louis Dreyfus are ongoing.”
The world’s largest IPO this year after Facebook had attracted a strong cast of more than 10 cornerstone investors, including foreign firms AIA Group, Hong Kong’s Value Partners, Fidelity Investments and Middle Eastern sovereign fund Qatar Holding LLC.
According to The Edge, Louis Dreyfus’ withdrawal happened at a time when foreign investors were unhappy with the paltry 10 per cent shares allocated for non-local funds.
However, Reuters reported that market observers believe the Paris-based company’s action was unlikely to affect FGVH’s debut as its institutional offer of 1.92 billion shares has been oversubscribed.
“Whether they are taking up their strategic stake doesn’t matter as the book is already 40 times oversubscribed,” the international news agency quoted an unnamed source close to the deal as saying when the news about Louis Dreyfus emerged.
Malaysian companies making their market debut have largely outshone those of most other Asian countries this year due to the dominant role of local investors who have shielded it from the global shake-up.
The planned June 28 listing will create the world’s third-largest palm oil operator with a market capitalisation of RM16.6 billion.