KUALA LUMPUR: Boustead Holdings Bhd is selling 33 per cent stake in Boustead Plantations Bhd (BPlant) to Kuala Lumpur Kepong Bhd (KLK) in a deal which values the company at more than RM3 billion, according to sources.
It is understood that the sale is part of a strategic plan by Boustead, its parent Armed Forces Fund Board (LTAT) and KLK to take BPlant private.
The sale of the significant chunk of Boustead's 57 per cent stake in BPlant to KLK will trigger a mandatory general offer.
Prior to the stake sale, Boustead and LTAT collectively hold a 67 per cent stake in BPlant.
It is understood that the three parties will act as joint offerors for the remaining 33 per cent stake in BPlant held by minority shareholders.
Post the general offer, KLK will be the majority shareholder of BPlant, which owns more than 98,000ha of land.
People familiar with the deal said the exercise will allow Boustead to raise substantial funds to partially settle its RM1.4 billion borrowing due next year.
LTAT and Boustead will have the rights to progressively exit BPlant or enjoy the value creation in collaboration with KLK, they added.
BPlant's share price has jumped 100 per cent since early June, when news broke that Boustead was readying itself to divest its ownership in BPlant.
Boustead is understood to have invited proposals for the sale of its stake in BPlant.
Among the prominent contenders vying for the stake are companies such as YTL Group, Wilmar International Bhd and IOI Corp Bhd.
Today, BPlant's share price closed nine sen, or 7.03 per cent, higher at RM1.37, giving it a market capitalisation of RM3.07 billion.
Meanwhile, in a late filing today, Bursa said BPlant's share trading will be suspended from 9am tomorrow pending an announcement.