IOI Corp launches Unico-Desa buyout

This is written by my colleague Lim Cian Yai.

KUALA LUMPUR: PLANTATION and property giant IOI Corp Bhd has launched a RM1 billion buyout of Unico-Desa Plantations Bhd.

IOI Corp yesterday announced the acquisition of a 39.55 per cent stake, or 339 million shares, in Unico-Desa by its subsidiary, IOI Plantation Sdn Sdn Bhd.

The stake was bought from former Unico-Desa managing director Teoh Hock Chai and Amity Corp Sdn Bhd for RM396.63 million, or RM1.17 per share.

The deal has triggered a mandatory takeover offer for the remaining 60.45 per cent stake in Unico-Desa, IOI Corp said in its filing to Bursa Malaysia yesterday.

The mandatory offer, also priced at RM1.17 per share, will amount to RM606 million. So collectively, IOI Corp will be paying RM1 billion for all of Unico-Desa shares.

Unico-Desa's core business is in the cultivation of oil palms, milling and distribution of palm oil and palm kernel oil. About 12,700ha in Lahad Datu and Kinabatangan, Sabah, is planted with oil palms, of which 9,121ha is of prime bearing ages. 

The RM1.17 a share price tag works out to be a 37 per cent premium above Unico-Desa's net asset of 85 sen a share.

IOI Corp said the acquisition will increase its plantation landbank to 196,867ha from 183,207ha. "This is expected to bring synergistic benefits to IOI Corp as it has an existing 98,088ha planted with oil palm in Sabah," the company said.

Upon completion of the buyout, IOI Corp's gearing ratio will increase marginally to 0.39 time. It does not intend to maintain Unico-Desa's listing. 

Unico-Desa is listed on Bursa Malaysia's Main Market since 2000. It netted RM25.46 million in profits for the year ended March 2013. Yesterday, Unico-Desa's shares closed unchanged at RM1.18.