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    IJMPLNT   MYL2216OO009

IJM PLANTATIONS

(IJMPLNT)
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Malaysia's KLK offers $372 mln for majority stake in IJM Plantations

06/09/2021 | 11:01pm EDT

* KLK offers to acquire IJM Corp's stake in IJM Plantations

* IJM Corp agrees in principle to finalise terms with KLK

* Merger would expand KLK's plantation size

KUALA LUMPUR, June 9 (Reuters) - Malaysian palm oil giant Kuala Lumpur Kepong (KLK) Bhd plans to acquire IJM Corporation Bhd's stake in IJM Plantations Bhd for 1.53 billion ringgit ($372 million) in cash, the companies said on Wednesday.

Construction group IJM Corp said it had agreed in principle to sell its 56.2% holding, while KLK said that once the deal was done, it would make a mandatory general offer to buy the remaining IJM Plantations shares it did not own.

Shares in IJM Plantations jumped 23.2% at the morning bell on Thursday. IJM Corp climbed 8.4%, while KLK rose 1.7%.

KLK offered to buy the stake at 3.10 ringgit per share, a 26% premium to IJM Plantations' last traded share price before the announcement and valuing it at 2.73 billion ringgit. Analysts said the offer was fair.

IJM Corp's disposal of its plantation division comes at an opportune time, capitalising on a crude palm oil upcycle to fetch a higher valuation, MIDF Research analyst Khoo Zhen Ye said in a note.

IJM Plantations posted record profit in its last financial year but was loss-making in the previous two years.

The deal will also allow IJM Corp to strengthen its balance sheet so that it can take on large construction and infrastructure projects, Khoo said.

KLK has a total planted area of 223,964 hectares across Malaysia, Indonesia and Liberia. Acquiring IJM Plantation, which has a planted area of 60,966 hectares across Malaysia and Indonesia, could expand KLK's planted area by around 27%.

"It will also allow KLK to lower its average estate age profile slightly," Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note on Thursday.

($1 = 4.1160 ringgit) (Reporting by Mei Mei Chu, Additional reporting by Liz Lee, Editing by Bernadette Baum and Edwina Gibbs)


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
CIMB GROUP HOLDINGS -0.65% 4.6 End-of-day quote.6.98%
CRUDE PALM OIL 0.00% 879.25 End-of-day quote.3.21%
IJM CORPORATION 0.53% 1.9 End-of-day quote.9.83%
IJM PLANTATIONS 0.00% 3.09 End-of-day quote.69.78%
KUALA LUMPUR KEPONG 2.58% 21.44 End-of-day quote.-9.46%
LONDON BRENT OIL 0.44% 73.22 Delayed Quote.41.20%
WTI 0.00% 71.41 Delayed Quote.47.13%
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Financials
Sales 2021 909 M 220 M 220 M
Net income 2021 110 M 26,6 M 26,6 M
Net cash 2021 641 M 155 M 155 M
P/E ratio 2021 24,9x
Yield 2021 1,12%
Capitalization 2 721 M 655 M 658 M
EV / Sales 2021 2,29x
EV / Sales 2022 2,37x
Nbr of Employees -
Free-Float 19,8%
Chart IJM PLANTATIONS
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IJM Plantations Technical Analysis Chart | MarketScreener
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Technical analysis trends IJM PLANTATIONS
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 9
Average target price 2,70 MYR
Last Close Price 3,09 MYR
Spread / Highest target 2,91%
Spread / Average Target -12,6%
Spread / Lowest Target -38,5%
EPS Revisions
Managers and Directors
NameTitle
Choon Yee Tek CEO, Managing Director & Executive Director
Purushothaman Kumaran Chief Financial Officer & Executive Director
Pushpanathan S. A. Kanagarayar Independent Non-Executive Chairman
Hock Leang Lee General Manager-Engineering
Yuen May Choo Independent Non-Executive Director
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