A renewed bid of 740p a share by Kuala Lumpur Kepong Berhad, known as KLK, has been roundly rejected by MP Evans ' (MPE) management team, which claimed it "very substantially undervalues" the company. This was in spite of the offer being at a roughly 75 per cent premium to the share price of 432p at which the stock stood before KLK's first bid (at 640p a share) was made.
After the initial bid, MP Evans quickly put out a list of investors - representing nearly 55 per cent of the shares in issue - who supported its stance. Subsequent to the second bid, a list of shareholders equalling a lower 41 per cent has been issued. This second list was released more quickly, but unlike the first one does not include Fidelity and JPMorgan Asset Management.
But some analysts also agree that, although the revised bid is closer to what could be considered fair value, it's not there yet. Edward Hugo, head of research at VSA Capital, said the offer was still below his 780p-850p a share fair price range, based on previously completed palm oil company deals and MP Evans' Malaysian property interests.
That said, he suggested the finality of the deal could sway some institutional investors to accept the offer considering the shares' low liquidity makes exiting the stock difficult.
The KLK offer is final and can only be increased if another bidder enters the fray or MP Evans suggests a higher price. Mr Hugo said he had "not seen this latter clause before".
"It shows KLK is definitely determined and it has the firepower," he added.
Palm Oil
