IOI Corp Bhd is in talks to buy Achi Jaya Plantations Sdn Bhd’s, 12,074 ha oil palm plantation in Labis Johor, and possibly other assets as well, sources familiar with the matter tell KiniBiz. It is understood that the price being negotiated is between RM800m to RM900m.
“Talks are ongoing, it’s not sure when it will be concluded though, the company (Achi Jaya Plantations) has been up for sale for a while,‖ a source said..It is not clear exactly what assets IOI is looking at. IOI’s executive director Lee Yeow Chor declined to answer questions from KiniBiz, pertaining to the Achi Jaya Plantations acquisition.
Achi Jaya Plantations (formerly Achi Jaya Services) acquired Socfin Plantations Sdn Bhd’s assets comprising the 12,074ha oil palm estate, workers’ quarters, staff and executive bungalows, clubhouse, a nine-hole golf course, a 60-tonne oil mill and other facilities and amenities for RM512.16m in January 2004.
The price jump from RM512.16m to current prices of RM800m to RM900m or close to 80%, does raise some eyebrows. (Kinibiz)
Assuming the estates are well-managed and age profile of the tree is decent, we would view the acquisition price of RM800-900m for a 100% stake in the estates to be reasonable as it would roughly priced the estates on EV./planted ha at RM66,258 to RM74,540, assuming the company has no debt. IOI should have no problem funding this acquisition, Potential earnings impact from this deal is not expected to be significant. Overall, we are neutral on this potential deal based on the sketchy details.
Source: CIMB Daybreak – 18 April 2013