Last month state-owned Felda, or the Federal Land Development Authority, said it would boost its stake in FGV, as it moves towards taking control of the world's largest producer of crude palm oil.

It offered 1.30 ringgit ($0.3221) for each share it did not already own. Felda controlled 54.09% of FGV shares by Jan. 15.

On Friday, FGV said its five independent directors asked investors to reject the offer, which would have taken the company private, as it was below fair value.

Independent adviser RHB Investment Bank put FGV's fair value at 1.42 ringgit to 1.60 ringgit a share, FGV said in a statement.

"Keeping FGV as a public listed company will ensure the transparency and timely disclosures of FGV, being one of the largest plantation companies in the world..." it said.

RHB added that while the offer was "not fair", it was reasonable, as FGV had not received any other offers, and the bank urged minority shareholders to accept the offer.

It added that Felda's current shareholding gives it control of FGV's decisions, FGV said.

FGV debuted 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 IPO after Facebook.

But shares have since tumbled as the company grappled with financial and governance issues.

Shareholders have until Feb. 2 to accept the Felda offer, FGV said.

($1=4.0360 ringgit)

(Reporting by Mei Mei Chu; Editing by Clarence Fernandez)