Highlight: IOI makes MGO for Unico-Desa after buying 39.55% stake

KUALA LUMPUR (Oct 2 ): IOI Corp Bhd, via wholly-owned unit IOI Plantation Sdn Bhd, is making a take-over offer for the remaining 60.45% stake it does not own in oil palm plantation firm Unico-Desa Plantations Bhd for RM1.17 a share.

In a statement to the exchange today, IOI said the proposed mandatory general offer (MGO) for the remaining 518.11 million shares in Unico-Desa follows its acquisition of a 39.55% stake in Unico-Desa.

IOI said it paid RM396.63 million or RM1.17 a share for the 39.55% stake.

The RM1.17 a share price compares with Unico-Desa's latest reported book value of 85 sen a share.

Unico-Desa share rose seven sen or 6% to RM1.25 before its trading was halted pending the announcement.

"The acquisition (of the 39.55% stake) is in line with IOI Corp group’s plans to expand its oil palm business, whereby IOI Corp group’s plantation land bank will increase by 13,660 ha or approximately 7.5% from its present 183,207 ha to 196,867 ha," IOI said.

IOI said it has bought the 39.55% stake in Unico-Desa from ELK Group Sdn Bhd, Eng Lee Kredit Sdn Bhd, Eng Lee Capital Sdn Bhd, and Amity Corp Sdn Bhd. These firms are controlled by Teoh Hock Chai, the managing director of Unico-Desa, and his associates.

According to IOI, the purchase of a stake in Unico-Desa will give the buyer "immediate access and a controlling ownership over Unico’s established plantation operations located in Sabah".

IOI said it already owns 98,088 ha of oil palm plantation tracts in Sabah.

"The acquisition and MGO is expected to enhance the IOI Corp group’s core plantation operations and contribute positively to the future earnings of IOI Corp group.

"The acquisition was completed today. The MGO is expected to be completed before first quarter of calendar year 2014," IOI said.

Upon completion of the MGO, IOI said it plans to delist Unico-Desa from Bursa Malaysia.

Unico-Desa has been listed on the exchange since May 25, 2000. The firm, which cultivates oil palm trees in Lahad Datu and Kinabatangan, Sabah, also undertake palm oil milling. It was set up by the Associated Chinese Chamber and Industry of Malaysia in the 1980s.