Khor Reports notes & comment:
Last minute negotiations seem to save Felda Global from serious embarrassment, as it doesn't lose one of its (if not "the" most) prominent strategic investors - Louis Dreyfus Commodities.
However, from an initial offer of 5% to a final take-up of a 0.5% stake (a 90% reduction), as widely reported in newspapers, this seems cold comfort. Thus, 10% of what was initially offered was finally done, and apparently well past the expected cut-off date. Felda Global says that the stake was reduced because of high IPO demand.
Industry commentators contrast this 0.5% stake with fellow global commodity giant, Archer Daniels Midland's (ADM) 16.4% interest in Wilmar@. Despite the low figure, the 0.5% stake is still touted as a "strategic investment."
Industry commentators contrast this 0.5% stake with fellow global commodity giant, Archer Daniels Midland's (ADM) 16.4% interest in Wilmar@. Despite the low figure, the 0.5% stake is still touted as a "strategic investment."
On 21 June, the FT notes: "The involvement of Dreyfus as a strategic investor was widely seen as a key element of the biggest IPO since Facebook’s stock market listing last month...“It’s [the Dreyfus involvement] something that’s been pretty prominently talked about as a big ticket item and it’s an embarrassment. This was something that was meant to be a key part of the IPO,” a third person said. “There is a lot of tension and heated tempers right now.”...."
A strategic partnership is apparently also now in place, although details were not disclosed. It is likely that Louis Dreyfus Commodities sought to market Felda Global's palm oil; but we hear from industry sources that Felda Global may not have been entirely keen to outsource its marketing to third parties.
It would have been interesting to be the proverbial "fly on the wall" when Felda Global and Louis Dreyfus thrashed out the latest strategic investment and strategic partnership. Did Felda Global have to offer better terms to Louis Dreyfus to lure them back, after news reports that its expected stake was given out to others? Was an even better, lower effective price, given to the commodity company?
News articles:
@"The Company has a 16.4% ownership interest in Wilmar International Limited (Wilmar), a Singapore publicly listed company. Wilmar, a leading agribusiness group in Asia, is engaged in the businesses of oil palm cultivation, oilseeds crushing, edible oils refining, sugar, consumer pack edible oils processing and merchandising, specialty fats, oleo chemicals, biodiesel, fertilizers and soy protein manufacturing, rice and flour milling, and grains merchandising...."
http://www.adm.com/en-US/investors/Documents/2011-ADM-Annual-Report-EN.pdf