FOR IMMEDIATE RELEASE
1 December 2016
INCREASED CASH OFFER
for
M.P. EVANS GROUP PLC ("MP EVANS" or the "COMPANY") by
KUALA LUMPUR KEPONG BERHAD ("KLK")
through its wholly-owned subsidiary, KL-KEPONG INTERNATIONAL LTD ("KLKI")
Accept the Increased Offer
On 15 November 2016, the Board of KLK, through its wholly-owned subsidiary, KLKI, announced the terms of a revised cash offer at 740 pence per share for MP Evans by KLKI to acquire the entire issued and to be issued share capital of MP Evans (the "Increased Offer"). The offer document in respect of the Increased Offer (the "Offer Document") was published on 18 November 2016.
MP Evans published a response (the "Response Document") on 25 November 2016 in which the Board of MP Evans recommended MP Evans Shareholders not to accept the Increased Offer on the basis of an attributed value per MP Evans Share (the "MP Evans Valuation") which is in excess of the Increased Offer price of 740 pence per MP Evans Share (the "Increased Offer Consideration").
In setting out KLK's reply to MPE's Response Document and the reasons why KLK believes MP Evans Shareholders should accept the Increased Offer, KLK wishes to ensure that all relevant facts and data are made available to MP Evans Shareholders so that they may make an informed decision in respect of the Increased Offer.
KLK urges MP Evans Shareholders to accept the Increased Offer as soon as reasonably practicable in respect of their MP Evans Shares in order to take advantage of the certainty of receiving very substantially more in cash than the price that MP Evans Shares have ever closed at before the commencement of the Offer Period.
The Increased Offer represents a premium of 81 per cent. to the Undisturbed Price. In addition, the Increased Offer represents a premium of 34 per cent. to the highest ever Closing Price of 553.8 pence per MP Evans Share before the commencement of the Offer Period.
The Increased Offer represents an unprecedented opportunity for MP Evans Shareholders to exit their entire stake in full and in cash, in light of the low trading volume in the MP Evans Shares.
KLK continues to support its highly attractive Increased Offer (implying a value of MP Evans' total planted area per hectare of c. $14,100) and disputes the implied lower value attributed to the Increased Offer by MP Evans in its Response Document.
KLK notes that, in relation to the Indonesian plantation interests of MP Evans (which constitute the majority of the value attributable to the Company), MP Evans did not use precedent sales of Indonesian plantations as comparables in arriving at the MP Evans Valuation but, instead, elected to use precedent sales of Malaysian and Papua New Guinean plantations, which are of an inherently higher value due to the differing operating environments/circumstances in those countries compared to Indonesia.
Precedent sales of majority stakes in Indonesian plantation estates indicate an average enterprise value ("EV") / planted hectare ("Ha") of c. $10,285. The Increased Offer implies a value of MP Evans' total planted area per hectare of c. $14,100, a c. 37 per cent. premium to the selected precedent transactions referred to below:
|
Announcement Date |
Target |
Plantation Estate Location in Indonesia |
Acquirer |
EV/planted Ha ($/Ha) |
|
27-Jun-16 |
PT Agro Abadi Cemerlag |
West Kalimantan |
Genting Plantations |
11,630 |
|
11-May-16 |
PT Golden Plantation Tbk |
South Kalimantan, Central Kalimantan, West Kalimantan, South Sumatra, Riau and Jambi |
PT JOM Prawarsa Indonesia |
5,288 |
|
10-Feb-16 |
PT Nusa Persada Indonesia, PT Surya Panen Subur, PT Tempirai Palm Resources, PT Rambang Agro Jaya |
South Kalimantan, South Sumatra and Aceh |
PT Wisesa Inspirasi Nusantara (subsidiary of Kulim) |
8,046 |
|
15-Dec-15 |
PT Lifere Agro Kapuas |
Central Kalimantan |
United Malacca Berhad |
15,293 |
|
22-Jul-15 |
Pacific Agri Resources Pte Ltd |
West Kalimantan |
First Resources |
11,930 |
|
02-Mar-15 |
PT Surya Agro Persada |
South Sumatra |
Oriental Holdings |
9,521 |
|
|
Average |
10,285 |
||
KLK also notes that the land attributable to the Indonesian smallholder co-operative schemes belongs to the co-operatives and not to MP Evans. In general, once the loans advanced to co-operatives have been repaid, they may sell their produce to any company and may choose to be managed by any plantation operator.
KLK also notes that the value of $81 million attributed to MP Evans' Malaysian properties in the Response Document is almost double the market value which MP Evans attributed to them in its latest audited annual report and accounts for the financial year ended 31 December 2015 (the "2015 Annual Report"):
• "The land is estimated, based on independent advice, to have a value of approximately US$16 million."
• "The Group's 40% investment in Bertam Properties is currently estimated to be worth in excess of US$30 million."
The reported book value of MP Evans' 40 per cent. interest in Bertam Properties in the 2015 Annual Report was approximately $15.1 million. This is set against a weak Malaysian property market, with the total volume of transactions for all sectors in the State of Penang (the location of MP Evans' Malaysian properties) in 2015 registering a fall of 15.6 per cent. against 2014 and the value of transactions registering a fall of 15 per cent. Residential transactions, which made up 70.9 per cent. of the total volume of property transactions in 2015 (2014: 72 per cent.), recorded a drop of 16.9 per cent. and 18.5 per cent. in terms of volume and value, respectively, when compared to 2014. However, the outlook for the Penang property market is expected to worsen in the short term (Source: Knight Frank LLP "Malaysia Real Estate Highlights 1H2016" report).
In addition, it is MP Evans' long-term intention to dispose of its small Bertam Estate and its 40 per cent. interest in Bertam Properties to reinvest in Indonesian palm oil. However, to date, MP Evans' management has failed to achieve this, again highlighting the weakness in the Malaysian property market.
Even if MP Evans' Malaysian properties were to be valued at the market value of $46 million set out in the 2015 Annual Report and the net cash of $73 million (as per the Response Document, which disregards the $19 million that has already been depleted through dividends or off-set by disclosed tax charges, with a further $9 million committed to payment of the increased dividend) were to be used in calculating the implied value of MP Evans' total planted area per hectare represented by the Increased Offer, that implied value would be c. $12,500, still a substantial 22 per cent. premium to the average EV / planted Ha value for the selected precedent transactions referred to above.
KLK notes that the Closing Price per MP Evans Share on 25 November 2016, the date on which the Response Document was published, remained unchanged at 681 pence per MP Evans Share compared to the prior Business Day.
Furthermore, KLK notes that the price per MP Evans Shares since publication of the Response Document has remained well below the Increased Offer Consideration.
The MP Evans Valuation is therefore illusory as it is not supported by the market's reaction following the publication of the Response Document.
Since KLK published its Increased Offer, MP Evans has stated an intention to increase its dividend in a belated attempt to improve financial returns for MP Evans Shareholders. Even based on the intended aggregate 15.0 pence dividend for 2016, the implied dividend yield based on the MP Evans Valuation is still only 1.4 per cent.
KLK would also draw MP Evans Shareholders' attention to the fact that the MP Evans Valuation represents a high price-to-earnings ratio of 79.2x. Notwithstanding improved performance based on crop increases and higher commodity prices, this P/E ratio would still be high.
In assessing the weight to be given to the MP Evans Valuation, KLK urges MP Evans Shareholders to consider that:
• MP Evans has not sought to repurchase MP Evans Shares at a time when the claimed MP Evans Valuation was far in excess of the market price of MP Evans Shares, with the perceived potential to create substantial value for MP Evans Shareholders, as a whole; and
• only since the Increased Offer was made has the Board of MP Evans written to MP Evans Shareholders to explain its implied value for MP Evans Shares at more than two and a half times the Undisturbed Price.
The Board of KLK believes that achieving any value per MP Evans Share in excess of the Increased Offer Consideration is subject to a high degree of uncertainty and would be unprecedented based on historic trading volumes in MP Evans Shares. By contrast, the Increased Offer represents an attractive value proposition at a substantial premium with a high degree of certainty.
MP Evans Shareholders should note that the Increased Offer is conditional only on valid acceptances being received by the First Closing Date in respect of more than 50 per cent. of the MP Evans Shares, as more fully described in the Offer Document.
The Increased Offer is final and is not capable of being increased, save that KLKI reserves the right to increase the price per MP Evans Share payable pursuant to the terms of the Increased Offer in the event of: (i) a public announcement of the existence of a new offeror or potential offeror, whether publicly identified or not; or (ii) the recommendation of such an increased offer by KLK or KLKI by the Board of MP Evans.
* If the Increased Offer becomes, or is declared, unconditional as to acceptances, it must remain open for not less than a further 14 days.
To accept the Increased Offer in respect of MP Evans Shares held in certificated form (that is, not in CREST), you should complete, sign and return the Form of Acceptance that was sent to MP Evans Shareholders with the Offer Document so as to be received by the Receiving Agent, Capita Asset Services, by no later than 1.00 p.m. (London time) on 9 December 2016 in accordance with the procedures set out in the Offer Document.
Acceptances in respect of MP Evans Shares held in uncertificated form should be made electronically through CREST. You should ensure that an Electronic Acceptance is made by you or on your behalf and that settlement occurs by no later than 1.00 p.m. (London time) on 9 December 2016 in accordance with the procedures set out in the Offer Document. CREST sponsored members should refer to their CREST sponsor as only CREST sponsors will be able to send the necessary TTE instruction to Euroclear.
Save as set out in this announcement, the following constitute the sources and bases of information referred to in this announcement:
A. Any references to the value of the Increased Offer for the entire issued and to be issued ordinary share capital of MP Evans are to 56,134,719 MP Evans Shares based on: (i) the number of MP Evans Shares currently in issue being 55,739,719; and (ii) the number of MP Evans Shares subject to outstanding options and/or awards granted under the MP Evans Share Schemes being 395,000, in each case, such numbers being based on information publicly available to KLKI as at the date of this announcement.
B. Prior to the commencement of the Offer Period, the highest Closing Price that the MP Evans Shares have closed at was 553.8 pence on 10 September 2012.
C. The "Undisturbed Price" is the volume weighted average Closing Price of 408.5 pence per MP Evans Share for the twelve months ended on 24 October 2016 (being the last Business Day prior to the commencement of the Offer Period).
D. The comparable transactions relied upon by MP Evans are set out in the valuation report prepared by Khong & Jaafar dated 21 November 2016 on page 25 and refer to:
• Pontian United Plantations Berhad's acquisition of Golden Land Berhad in Beluran, Malaysia as set out in an article by Reuters on 7 June 2015 (http://www.reuters.com/finance/stocks/GOLD.KL/key-developments/article/3225853).
• Sime Darby Plantation Sdn Bhd's acquisition of New Britain Palm Oil Limited in Papua New Guinea as set out in the announcement on the Sime Darby Website on 2 March 2015 (http://www.simedarbyplantation.com/media/press-release/sime-darby- plantation-completes-nbpol-acquisition).
• IOI Plantation Sdn Bhd's acquisition of Unico-Desa Plantations Berhad in Sabah, Malaysia as set out in the Borneo Post article on 4 October 2013 (http://www.theborneopost.com/2013/10/04/ioi-corp-to-benefit-from-unico-desa- takeover/).
• Felda Global Ventures Holdings Berhad's acquisition of Pontian Untied Plantations Berhad in Sabah, Malaysia as set out in the Felda Global Ventures press release on 1 October 2013 (http://ir.chartnexus.com/fgv/website_HTML/attachments/ attachment_39224_ 1384149981.pdf).
E. Analysis of publicly available precedent transactions of majority stakes (>50 per cent.) in Indonesian plantation estates with an enterprise value of greater than $25 million since 1 January 2015 is set out below:
|
Announcement date |
27-Jun-16 |
|||
|
Target |
PT Agro Abadi Cemerlang |
|||
|
Acquirer |
Genting Plantations |
|||
|
Currency |
$ |
|||
|
Data |
Value |
Comment |
Source |
Website |
|
Offer price (A) ($m) |
34.6 |
|
Genting Plantations announcement 27 Jun 16, pg 1 |
http://www.genting.com/press/ 2016/GENP_27062016_b.pdf |
|
Stake acquired (B) |
95.0% |
|
Genting Plantations announcement 27 Jun 16, pg 1 |
http://www.genting.com/press/ 2016/GENP_27062016_b.pdf |
|
Equity value (C = A / B) ($m) |
36.4 |
|
|
|
|
Debt (D) ($m) |
0.0 |
Liabilities/Cash deducted from purchase price |
Genting Plantations announcement 27 Jun 16, pg 7 |
http://www.genting.com/press/ 2016/GENP_27062016_b.pdf |
|
Cash (E) ($m) |
0.0 |
Liabilities/Cash deducted from purchase price |
Genting Plantations announcement 27 Jun 16, pg 7 |
http://www.genting.com/press/ 2016/GENP_27062016_b.pdf |
|
Enterprise Value (F = A+B-C) ($m) |
36.4 |
|
|
|
|
Planted area (G) (Ha) |
3,127 |
|
Genting Plantations announcement 27 Jun 16, pg 8 |
http://www.genting.com/press/ 2016/GENP_27062016_b.pdf |
|
Enterprise Value / Planted area (F / G) ($ / Ha) |
11,630 |
|
|
|
|
Announcement date |
11-May-16 |
|||
|
Target |
PT Golden Plantation Tbk |
|||
|
Acquirer |
PT JOM Prawarsa Indonesia |
|||
|
Currency |
$1 = IDR13,305m exchange rate |
|||
|
Data |
Value |
Comment |
Source |
Website |
|
Offer price (A) ($m) |
39.2 |
Consideration of IDR521.428bn |
TPS Food H1 2015 interim results, pg 11 |
http://www.tigapilar.com/ investor_relation |
|
Stake acquired (B) |
78.2% |
|
TPS Food H1 2015 interim results, pg 11` |
http://www.tigapilar.com/ investor_relation |
|
Equity value (C = A / B) ($m) |
50.1 |
|
|
|
|
Debt (D) ($m) |
79.3 |
LT Bank Loans and Financial Institutions = IDR1,051,618m ST Bank Loans and Financial Institutions = IDR3,800m |
Golden Plantation Annual Report 2015, pg 62 |
http://www.goldenplantation.com/ upload/investor_relation/Annual_ Report_2015.pdf |
|
Cash (E) ($m) |
0.2 |
Cash and cash equivalent = IDR2,241m |
Golden Plantation Annual Report 2015, pg 60 |
http://www.goldenplantation.com/ upload/investor_relation/Annual_ Report_2015.pdf |
|
Enterprise Value (F = A+B-C) ($m) |
129.3 |
|
|
|
|
Planted area (G) (Ha) |
24,452 |
|
Golden Plantation Annual Report 2015, pg 7 |
http://www.goldenplantation.com/ upload/investor_relation/Annual_ Report_2015.pdf |
|
Enterprise Value / Planted area (F / G) ($ / Ha) |
5,288 |
|
|
|
|
Announcement date |
10-Feb-16 |
|||
|
Target |
PT Nusa Persada Indonesia, PT Surya Panen Subur, PT Tempirai Palm Resources, PT Rambang Agro Jaya |
|||
|
Acquirer |
PT Wisesa Inspirasi Nusantara (subsidiary of Kulim) |
|||
|
Currency |
$1 = IDR13,462m exchange rate |
|||
|
Data |
Value |
Comment |
Source |
Website |
|
Offer price (A) ($m) |
121.7 |
Consideration of IDR1,637.794bn |
Kulim (Malaysia) Berhad announcement 10 February 2016, pg 2 |
http://disclosure.bursamalaysia. com/FileAccess/apbursaweb/down load?id=71072&name=EA_GA_ ATTACHMENTS |
|
Stake acquired (B) |
95% |
|
Kulim (Malaysia) Berhad announcement 10 February 2016, pg 2 |
http://disclosure.bursamalaysia. com/FileAccess/apbursaweb/down load?id=71072&name=EA_GA_ ATTACHMENTS |
|
Equity value (C = A / B) ($m) |
128.1 |
|
|
|
|
Debt (D) ($m) |
148.6 |
Aggregate borrowings of c.IDR2.0 trillion |
Kulim (Malaysia) Berhad announcement 10 February 2016, pg 5 |
http://disclosure.bursamalaysia. com/FileAccess/apbursaweb/down load?id=71072&name=EA_GA_ ATTACHMENTS |
|
Cash (E) ($m) |
0.0 |
|
|
|
|
Enterprise Value (F = A+B-C) ($m) |
276.6 |
|
|
|
|
Planted area (G) (Ha) |
34,382 |
|
Kulim (Malaysia) Berhad announcement 10 February 2016, pg 8 |
http://disclosure.bursamalaysia. com/FileAccess/apbursaweb/down load?id=71072&name=EA_GA_ ATTACHMENTS |
|
Enterprise Value / Planted area (F / G) ($ / Ha) |
8,046 |
|
|
|
|
Announcement date |
15-Dec-15 |
|||
|
Target |
PT Lifere Agro Kapuas |
|||
|
Acquirer |
United Malacca Berhad |
|||
|
Currency |
$ |
|||
|
Data |
Value |
Comment |
Source |
Website |
|
Offer price (A) ($m) |
66.4 |
|
United Malacca Berhad announcement 15 December 2015, pg 1 |
http://disclosure.bursamalaysia.com/ FileAccess/apbursaweb/download?id= 70097&name=EA_GA_ATTACHMENTS |
|
Stake acquired (B) |
83% |
|
United Malacca Berhad announcement 15 December 2015, pg 1 |
http://disclosure.bursamalaysia.com/ FileAccess/apbursaweb/download?id= 70097&name=EA_GA_ ATTACHMENTS |
|
Equity value (C = A / B) ($m) |
80.0 |
|
|
|
|
Debt (D) ($m) |
0.0 |
No liabilities assumed on acquisition |
United Malacca Berhad announcement 15 December 2015, pg 10 |
http://disclosure.bursamalaysia.com/ FileAccess/apbursaweb/download?id= 70097&name=EA_GA_ ATTACHMENTS |
|
Cash (E) ($m) |
0.0 |
|
United Malacca Berhad announcement 15 December 2015, pg 10 |
http://disclosure.bursamalaysia.com/ FileAccess/apbursaweb/download?id= 70097&name=EA_GA_ATTACHMENTS |
|
Enterprise Value (F = A+B-C) ($m) |
80.0 |
|
|
|
|
Planted area (G) (Ha) |
5,231 |
|
United Malacca Berhad announcement 15 December 2015, pg 13 |
http://disclosure.bursamalaysia.com/ FileAccess/apbursaweb/download?id= 70097&name=EA_GA_ATTACHMENTS |
|
Enterprise Value / Planted area (F / G) ($ / Ha) |
15,293 |
|
|
|
|
Announcement date |
22-Jul-15 |
|||
|
Target |
Pacific Agri Resources Pte Ltd |
|||
|
Acquirer |
First Resources |
|||
|
Currency |
$ |
|||
|
Data |
Value |
Comment |
Source |
Website |
|
Offer price (A) ($m) |
29.0 |
|
First Resources annual report 2015, pg 96 |
http://www.first-resources.com/ upload/file/20160412/ 20160412003506_42473.pdf |
|
Stake acquired (B) |
100% |
|
First Resources annual report 2015, pg 96 |
http://www.first-resources.com/ upload/file/20160412/ 20160412003506_42473.pdf |
|
Equity value (C = A / B) ($m) |
29.0 |
|
|
|
|
Debt (D) ($m) |
42.5 |
Settlement of amount owing to shareholder of $42,535,000 |
First Resources annual report 2015, pg 96 |
http://www.first-resources.com/ upload/file/20160412/ 20160412003506_42473.pdf |
|
Cash (E) ($m) |
0.0 |
|
|
|
|
Enterprise Value (F = A+B-C) ($m) |
71.6 |
|
|
|
|
Planted area (G) (Ha) |
6,000 |
|
Maybank Kim Eng Research as quoted by Brokerages and Day trading on 23 July 2015 |
http://www.brokeragesdaytrading. com/article/9679106611/maybank -kim-eng-research-2015-07-23- first-resources-small-acquisition- at-fair-price-maintain-buy-/ |
|
Enterprise Value / Planted area (F / G) ($ / Ha) |
11,930 |
|
|
|
|
Announcement date |
2-Mar-15 |
|||
|
Target |
PT Surya Agro Persada |
|||
|
Acquirer |
Oriental Holdings |
|||
|
Currency |
$1 = IDR12,968m exchange rate |
|||
|
Data |
Value |
Comment |
Source |
Website |
|
Offer price (A) ($m) |
1.4 |
Consideration of IDR18,406m |
Oriental holdings Berhad announcement 2 March 2015, pg 2 |
http://ohb.com.my/announcement/ 2015/PT%20SAP%20-Bursa%20Ann% 20v10.pdf |
|
Stake acquired (B) |
90% |
|
Oriental holdings Berhad announcement 2 March 2015, pg 2 |
http://ohb.com.my/announcement/ 2015/PT%20SAP%20-Bursa%20Ann% 20v10.pdf |
|
Equity value (C = A / B) ($m) |
1.6 |
|
|
|
|
Debt (D) ($m) |
25.8 |
IDR334,000m SAP's indebtedness to all its creditors |
Oriental holdings Berhad announcement 2 March 2015, pg 3 |
http://ohb.com.my/announcement/ 2015/PT%20SAP%20-Bursa%20Ann% 20v10.pdf |
|
Cash (E) ($m) |
0.0 |
|
|
http://ohb.com.my/announcement/ 2015/PT%20SAP%20-Bursa%20Ann% 20v10.pdf |
|
Enterprise Value (F = A+B-C) ($m) |
27.3 |
|
|
|
|
Planted area (G) (Ha) |
2,871 |
|
Oriental holdings Berhad announcement 2 March 2015, pg 3 |
http://ohb.com.my/announcement/ 2015/PT%20SAP%20-Bursa%20Ann% 20v10.pdf |
|
Enterprise Value / Planted area (F / G) ($ / Ha) |
9,521 |
|
|
|
F. The Response Document sets out on page 6 that "The Independent Valuer, Malaysian chartered surveyors and specialists in the valuation of Malaysian real estate, has provided an up-to- date, market valuation of these Malaysian Property assets, which values the Group's interests in them at an aggregate of $81 million, equivalent to 116 pence per M.P.Evans Share."
G. Citations from page 13 and 14 of the Knight Frank LLP "Malaysia Real Estate Highlights 1H2016" report, available at http://www.knightfrank.com.my/research/malaysia-real- estate-highlights-1h2016-3988.aspx.
H. The MP Evans annual report for the financial year to 31 December 2015 sets out the following:
• 40 per cent. holding in the Bertam Properties is held at $15.1 million from page 66.
I. The MP Evans 2015 preliminary results presentation from 12 April 2016 states on page 22:
"Ambitious capital programme continues on new projects: Could amount to US$75 million over 2016-2017
• Continuing planting programme
• Bangka mill due to be commissioned mid-2016; second mill in Kalimantan commencing construction in 2017
• Permanent housing programme and amenities in Kalimantan"
J. The price-to-earnings ratio of 79.2x implied by the MP Evans Valuation has been calculated using the MP Evans Valuation compared with the reported audited full year earnings per MP Evans Share from the continuing operations of MP Evans for the financial year ended 31 December 2015 (translated at the rate of $1.53:£1, being the average rate for the financial year ended 31 December 2015).
K. The MP Evans Valuation is the implied equity value per MP Evans Share set out on page 4 of the Response Document of 1082 pence per MP Evans Share.
L. The implied value of MP Evans' operations per hectare for MP Evans' effective share of its owned estates of approximately $14,100 is calculated based on the $ equity value of MP Evans, which is calculated by:
(i) multiplying the Increased Offer Consideration by the issued and to be issued share capital of MP Evans as at the date of the Offer Document, producing $515.1 million (translated at a rate of $1.24:£1 as at 17 November 2016, being the last Business Day prior to the publication of the Offer Document); subtracting
(ii) an adjusted net cash balance for MP Evans of $54.1 million (as described below) and the reported book value of MP Evans' 40 per cent. interest in Bertam Properties of $15.1 million as at 31 December 2015; and
(iii) dividing the resulting implied value for MP Evans' operations of $446 million by MP Evans' effective share of owned estates planted area of 31,713 hectares, as calculated on the basis described below (excluding any plantations held by smallholders under co- operative schemes as these are not owned and controlled by MP Evans).
The adjusted net cash balance for MP Evans of $54.1 million is calculated as the sum of net debt, negative $6.6 million as at 30 June 2016; plus the $79.7 million additional cash receipt on 21 July 2016 arising from the disposal of MP Evans' NAPCo business; less: (i) the deferred tax charge of $13.8 million (as reported in MP Evans' interim results for the six months ended 30 June 2016); (ii) $3.6 million, being the aggregate special dividend of five pence per MP Evans Share paid on 17 August 2016; and (iii) $1.6 million, being the aggregate Interim Dividend for the six months ended 30 June 2016 which was paid on 4 November 2016.
MP Evans' effective share of owned estates planted area is calculated based on the data set out in its annual report and accounts for the financial year ended 31 December 2015, as updated by MP Evans' presentation of its interim results for the six months ended 30 June 2016, extracted for convenience in the table below:
Majority Owned Estates
Kalimantan 10,250 95.0% 9,738
Bangka 5,450 90.0% 4,905
Musi Rawas 1,500 95.0% 1,425
North Sumatra 9,350 80.0% 7,480
Majority Owned Estates (Effective Share) 23,548
Associate Owned Estates (Effective Share) 8,100
Bertam Estate 65
Total Effective Share of Owned Estates Planted Area
M. The implied value of MP Evans' operations per hectare for MP Evans' effective share of its owned estates of approximately $12,500 if the Malaysian properties were to be valued at their 2015 Annual Report market value of $46 million and the adjusted net cash balance of
$73 million as disclosed in the Response Document were to be used, is calculated based on the $ equity value of MP Evans, which is calculated by:
(i) multiplying the Increased Offer Consideration by the issued and to be issued share capital of MP Evans as at the date of the Offer Document, producing $515.1 million (translated at a rate of $1.24:£1 as at 17 November 2016, being the last Business Day prior to the publication of the Offer Document); subtracting
(ii) an adjusted net cash balance for MP Evans of $73 million (as described in N. below) and the value of the Malaysian properties of $46 million (as described below); and
(iii) dividing the resulting implied value for MP Evans' operations of $396 million by MP Evans' effective share of owned estates planted area (31,713 hectares) less Bertam Estate's planted area (65 hectares), 31,648 hectares (excluding any plantations held by smallholders under co-operative schemes as these are not owned and controlled by MP Evans).
The value of the Malaysian properties of $46 million is calculated as the sum of $16 million for the land of the Bertam Estate and $30 million for MP Evans' 40 per cent. investment in Bertam Properties, both as disclosed on page 25 of the 2015 Annual Report:
"The land is estimated, based on independent advice, to have a value of approximately US$16 million."
"The Group's 40% investment in Bertam Properties is currently estimated to be worth in excess of US$30 million."
MP Evans' effective share of owned estates planted area is calculated as set out in L. above.
N.
The $73 million adjusted net cash balance, as disclosed in the Response Document, is calculated as the sum of net debt, negative $6.6 million as at 30 June 2016; plus the $79.7 million additional cash receipt on 21 July 2016 arising from the disposal of MP Evans' NAPCo business.
O. The $19 million of further depletions from the adjusted net cash balance is calculated as the sum of: (i) the deferred tax charge of $13.8 million (as reported in MP Evans' interim results for the six months ended 30 June 2016); (ii) $3.6 million, being the aggregate special dividend of 5 pence per MP Evans Share paid on 17 August 2016; and (iii) $1.6 million, being the aggregate Interim Dividend of 2.25 pence for the six months ended 30 June 2016 which was paid on 4 November 2016.
P. The MP Evans Valuation divided by the Undisturbed Price is 2.6 times.
Q. The daily average number of MP Evans Shares traded on a daily basis over the three years to 24 October 2016, being the last Business Day prior to the commencement of the Offer Period, was 26,755, representing less than 0.1 per cent. of the total number of MP Evans Shares in issue over that period. Daily trading data has been derived from Factset and represents the volume of MP Evans Shares traded on the relevant dates.
R. All prices quoted for MP Evans Shares have been derived from Factset and represent the closing middle market prices for MP Evans Shares on the relevant dates.
S. Foreign exchange rates as at any applicable date are taken from Factset.
T. Figures are stated subject to rounding and approximations.
The Offer Document and Form of Acceptance are available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on KLK's website at www.klk.com.my/investor- relations/mpevans while the Increased Offer remains open for acceptance. Hard copies of the Offer Document and the Form of Acceptance may be obtained by contacting the Receiving Agent, Capita Asset Services, in writing at Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU or by telephone on 0371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 a.m. and 5.30 p.m. (London time), Monday to Friday, (excluding public holidays in England and Wales). Please note that Capita Asset Services cannot provide advice on the merits of the Increased Offer nor give any financial, legal or tax advice. Calls may be recorded and monitored for security and training purposes.
Save as referred to in the following paragraph, for the purposes of Rule 27.2(a)(i) of the Code, there have been no material changes to any of the information disclosed in the Offer Document and, for the purposes of Rule 27.2(b)(ii) of the Code, there have been no material changes to the matters listed in Rule 27.2(b) of the Code since the publication of the Offer Document.
With respect to the conditional share subscription agreement in relation to PT Perindustrian Sawit Synergi ("PT PSS") referred to at paragraph 5 of Part V of the Offer Document, on 21 November 2016, KLK announced that KL-Kepong Plantation Holdings Sdn Bhd ("KLKPH") had entered into an amendment agreement pursuant to which it had conditionally agreed, amongst other things, to subscribe for 262,500 shares of Rp1,000,000 each, representing a 75 per cent. equity interest in PT PSS, for a total cash consideration of Rp262,500,000,000 (or approximately RM86.5 million) as a consequence of the parties agreeing to increase their subscriptions in PT PSS to reflect the proposed increase in the size and cost of the relevant refinery project.
Capitalised terms used but not defined in this announcement shall have the meanings given to them in the Offer Document.
David Chong +603 7809 8962
Teh Kwan Wey +603 7809 8965
Yap Miow Kien +605 240 8052
Oliver Smith +44 20 7991 8888
Rajeev Sahney Alex Thomas Nick Donald
The KLK Directors and the KLKI Directors accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the KLK Directors and KLKI Directors (who have taken all reasonable care to ensure such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.
HSBC Bank plc ("HSBC") is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom and is acting exclusively for KLK and KLKI and no one else in connection with the Increased Offer and other matters referred to in this announcement and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Increased Offer or any other matters referred to in this announcement and is not, and will not be, responsible to anyone other than KLK and KLKI for providing the protections afforded to its clients or for providing advice in relation to the Increased Offer, the contents of this announcement or any transaction or arrangement referred to in this announcement.
This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Increased Offer or otherwise. The Increased Offer has been made solely by means of the Offer Document and the Form of Acceptance accompanying the Offer Document, which contain the full terms and conditions of the Increased Offer, including details of how the Increased Offer may be accepted. Any response to the Increased Offer should be made only on the basis of information contained in the Offer Document and, where applicable, the Form of Acceptance. MP Evans Shareholders are advised to read the formal documentation in relation to the Increased Offer carefully.
This announcement has been prepared for the purposes of complying with English law, the rules of the London Stock Exchange and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside the United Kingdom.
The distribution of this announcement in jurisdictions other than the United Kingdom and the ability of MP Evans Shareholders who are not resident in the United Kingdom to participate in the Increased Offer may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom or MP Evans Shareholders who are not resident in the United Kingdom will need to inform themselves about, and observe, any applicable legal or regulatory requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. Further details in relation to overseas shareholders are contained in the Offer Document.
The Increased Offer is not available, directly or indirectly, in or into or by the use of the mails of, or by any other means or instrumentality of interstate or foreign commerce of, or any facility of a national state or other securities exchange of any Restricted Jurisdiction, unless conducted pursuant to an exemption from the applicable securities laws of such Restricted Jurisdiction.
Accordingly, copies of this announcement and all documents relating to the Increased Offer are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction except pursuant to an exemption from the applicable securities laws of such Restricted Jurisdiction and persons receiving this announcement (including, without limitation, agents, nominees, custodians and trustees) must not distribute, send or mail it in, into or from such jurisdiction. Any person (including, without limitation, any agent, nominee, custodian or trustee) who has a contractual or legal obligation, or may otherwise intend, to forward this announcement and/or the Offer Document and/or any other related document to a jurisdiction outside the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction.
This announcement contains certain forward looking statements with respect to the financial condition, results of operations and business of MP Evans, the MP Evans Group and certain plans and objectives of the boards of directors of KLK and KLKI. These forward looking statements can be identified by the fact that they do not relate to historical or current facts. Forward looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the boards of directors of MP Evans, KLK and KLKI in the light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward looking statements involve risk and uncertainty and the factors described in the context of such forward looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward looking statements.
Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this announcement. KLK and KLKI assume no obligation to update or correct the information contained in this announcement.
No statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for KLK or MP Evans, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for KLK or MP Evans, as appropriate.
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
12
A copy of this announcement will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on KLK's website at http://www.klk.com.my/ investor-relations/mpevans promptly and by no later than 12 noon (London time) on 2 December 2016. For the avoidance of doubt, the contents of that website are not incorporated, and do not form part of, this announcement.
In accordance with Rule 30.3 of the Code, a person so entitled may request a hard copy of this announcement, free of charge, by contacting HSBC on +44 20 7991 8888. For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested. In accordance with Rule 30.3 of the Code, a person so entitled may also request that all future documents, announcements and information to be sent to them in relation to the Increased Offer should be in hard copy form.
Neither the contents of any website referred to in this announcement nor the content of any other website accessible from hyperlinks on any such website is incorporated into, or forms part of, this announcement.
-ENDS-
13