25th Oct 2016 13:47
LONDON (Alliance News) - The board of palm oil and rubber plantation business MP Evans Group PLC on Tuesday confirmed that it has rejected a proposed takeover offer from Kuala Lumpur Kepong Bhd, saying that the offer is "wholly inadequate".
The statement from the company came after Kuala Lumpur Kepong took its offer directly to MP Evans shareholders.
The offer, to be made through Kuala Lumpur Kepong's wholly-owned subsidiary KL-Kepong International Ltd, is for 640 pence per share. Additionally, MP Evans shareholders will continue to be entitled to the 2.25p interim dividend MP Evans announced for the first half of 2016.
This takes the total offer to 642.25p, which values MP Evans around GBP360.5 million.
Shares in MP Evans were up 45% at 618.00p Tuesday following the announcement. The offer represents a premium of around 51% to MP Evans's closing price of 426.25p on Monday.
Kuala Lumpur Kepong said Tuesday its chief executive officer had, in recent weeks, held exploratory discussions with MP Evans, which led it to make a proposal earlier this month to the board of MP Evans, with an an indicative takeover offer for the company. However, this proposal was rejected by the board on October 13.
As a result, Kuala Lumpur Kepong said that it believes MP Evans shareholders should "now have the opportunity to decide on the merits" of its offer, noting it believes the deal is "highly attractive", given its substantial premium to MP Evans's current share price.
Later Tuesday the board of MP Evans confirmed it had rejected the "unsolicited offer", saying it believes that it "very substantially undervalues the company, its unique position and its future growth potential".
MP Evans said it would make a further announcement setting out its views on the offer, but in the meantime, strongly urged shareholders "take no action" in relation to their shares.
The offer is conditional on the receipt of valid acceptances for MP Evans shares which carry more than 50% of the company's voting rights.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
M P Evans