WHERE IS THE ADVANTAGE? SYED MOKHTAR, CHINA FIRM OFFER LITTLE SYNERGY TO FGV – RESEARCH HOUSE

PETALING JAYA – PublicInvest Research sees a cloud on the horizon over any potential synergies between Felda Global Ventures Holdings Bhd (FGV) and the two companies that are reportedly looking to buy stakes in the ailing plantation giant.

A business weekly reported that one of the companies is linked to tycoon Tan Sri Syed Mokhtar Albukhary while the other one is China-based China National Cereals, Oils and Foodstuffs Corporation (Cofco).

“It is tough to see any potential synergies arising between Syed Mokhtar’s plantation arm and FGV given that both are in the plantation-related space,” PublicInvest report read.

The report said while Cofco’s entry could potentially boost FGV’s venture in China’s downstream market, nonetheless taking into account China’s tightening on capital control, the company’s strategic investment in Malaysia might experience stumbling blocks in the form of its own central bank.

PublicInvest Research said if the deal is true, the pricing of the new placement as well as long-term synergy between the parties will be the key highlights in the deal.

In early March, FGV CEO and president Datuk Zakaria Arshad had brushed aside talks of Syed Mokhtar and the Tradewinds group being potential strategic long-term shareholders in FGV.

Zakaria, while declining to divulge the identities of candidates it has been in the talks with, said that FGV is on the lookout for shareholders that will be able to complement the plantation company.

Last year, there were reports of Syed Mokhtar being in preliminary talks to buy into FGV, which was later denied.

FGV’s shares closed at RM2.09, 18 sen higher than the previous day’s RM1.91 sen on some 69.72 million shares done.

– Sundaily

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