M.p. Evans Share Discussion Threads

[ed 123] 14/11/2016 12:40

Yes, all to play for ........ but it's approaching decision time for me.

Holding some in a nominee account with their date for notifying my wishes, Wednesday, 16th November.

Has anyone got the date for acceptance from the offeror? (It'll be later than 16th.)

I had hoped to see a higher offer by now. Fwiw, level 2 looks evenly balanced atm, at 627p mid. It seems there is no selling pressure or buying pressure; a continuation of the vacuum.

There may be a last minute move and an increased offer but my decision is likely to be made ahead of any such move.

No complaint from me; it's just the way the system works.

Maybe I'll sell in the market? I'm sitting on a c. 50% uplift and only bought fairly recently.

[exbroker] 03/11/2016 13:59

The cost savings both of the plc and in the field will be substantial, and as the plantations mature there will be a greater yield. All to play for!!

[ed 123] 02/11/2016 09:35

Ta, Exbroker. :-) I'd be delighted with just £7.00.

Significant risk remains. If the board and major investors are too ambitious, the bid may not be raised to an 'acceptable' level. Then it would go to the vote at 640p.

With figures like 815 to 1000p, where was everyone when the market price was sitting down at 420p? Even one of MPE's own directors was a seller.

[johnweaver] 31/10/2016 09:39

Exbroker, thanks for extra info.

Confession time, I cribbed the figures from broking firm with some knowledge of Ag sector.

[exbroker] 29/10/2016 11:06

Hi Johnweaver
Don’t forget the cash and property associates are worth about 100p and maybe more on top of the plantations.

[ed 123] 28/10/2016 10:07

Ta, Johnweaver. :-)

A new interested party would help here. If 640p is so cheap, and I don't doubt it, then another party may wish to beat that offer?

There will be lots of private conversations going on now and over the weekend.

Offeror can wait another >3 weeks before sending out documents, so plenty of time for discussions and, hopefully, something the Board will recommend.

[johnweaver] 28/10/2016 09:45

New Britain was taken out at £24 Asian Plantations at $21 The value being offered today is a mere $12. Yes, it is a high premium, but it is actually too low and they could easily afford to pay $15 and that would be 775p or about 25% higher.

[ed 123] 27/10/2016 23:35

Thanks, Exbroker. :-)

My own numbers? I don't have anything precise. I looked back at New Britain Palm Oil, which (as I'm sure you know) was taken over 2 years ago with a recommended offer at an 85% premium to the previous closing price of the shares. Although similar, the assets of MPE and NBPO are not the same, so I didn't attempt any actual build-up of asset value. A couple of brokers were suggesting about £6/share value for MPE, so I was happy enough to pick up shares around the £4.20 level.

In any event, the dollar sterling rate very much comes into play in any comparison. At the takeover of NBPO it was about $1.60 to £1. Now it's about $1.22 to £1.

Getting greedy, maybe MPE should be holding out for an extra currency factor of 1.60/1.22 = 1.31? Another 31% onto the sterling priced takeover offer of 640p for my MPE shares would put a big smile on my face. ;-)) I guess you'd be even happier?

[exbroker] 27/10/2016 10:59

Hi Ed123
On my numbers 640 values the plantations at $10k per HA and then the cash and property companies are worth about another 100p. Valuing the plantations at $11000 per HA and adding the properties on gives about 800p. I have had these since the Lendu days so know it quite well. Do your own numbers and check the relatives but I see upside hence buying a decent number on Tuesday.

[ed 123] 26/10/2016 19:28

Thanks, Exbroker. :-)

So, a game of seeing who blinks first, perhaps?

My thoughts .... How can a 640p cash bid undervalue the company when the shares have been sitting at under 450p for more than a year? Also, one of the directors sold 15,000 shares at 400p and 5,000 shares at 410p this summer. How can he now join the chorus of "undervalued"?

You must feel confident, topping up yesterday. I've not been holding very long and a 640p exit would do me fine. Kicking myself for not buying more, but there didn't look to be any rush .... or so I thought.

I'm still guessing a bit more will be offered and accepted. 660p?

Do you have a best guess?

[exbroker] 26/10/2016 17:12

An Arb bought the 65000, and another arb was active in the market today. From the company’s statement which is not binding from the various shareholders looks like they will try to tough it out for a higher price. Am long from a long time ago and bought more yesterday.

[ed 123] 25/10/2016 16:56

Hi Nocton.

Yes, I was of the same mind too, so was buying MPE as an asset play/dollar earner/takeover prospect. I got lucky today. It could have been a long, slow ride to 600p. For that reason I think the big holders will go for the 640p.

Re, the seller at 612p, people/institutions have many reasons for selling on occasions. It's not certain that the 65,000 share seller thinks the offer will be voted down.

More positively, there was a big would-be buyer at 610p in the closing auction. Only picked up 1,819 shares, so perhaps will come back tomorrow?

[nocton] 25/10/2016 16:34

I was expecting something like this after the sale of the cattle interest. MPE is a small player in the Malaysian & Indonesian PO industry. It surprises me that the price has not risen close to the offer price and that someone should sell out a large holding at 612p. This would suggest that they don't think the offer will go through, which I should have thought unlikely.

[ed 123] 25/10/2016 15:12

My view, fwiw.

MPE's rejection is based on the amount offered. They've held talks without conclusion, so there was a valuation gap before today. KLK thinks it's offering enough and is appealing to the major shareholders. The latter will decide this. Maybe they will snub management and go for the 640p?

My guess is a face saving few pence in exchange for a board recommendation.

Agreement at, say, 660p in a couple of days?

Happily holding and waiting for the next move. :-))

[traderabc] 25/10/2016 13:04

Thanks for that Tony.

[tonysss13] 25/10/2016 12:29

FOR IMMEDIATE RELEASE

25 October 2016

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")

Summary

· Following discussions with the Board of MP Evans, the board of directors of KLK, through its wholly-owned subsidiary, KLKI, announces the terms of a cash offer for MP Evans by KLKI to acquire the entire issued and to be issued share capital of MP Evans (the "Offer"). It is intended that the Offer will be implemented by means of a takeover offer under the Code and within the meaning of Part 28 of the Companies Act 2006.



· Under the terms of the Offer, MP Evans Shareholders will receive:

for each MP Evans Share 640 pence per share in cash



(the "Offer Consideration").



· In addition, MP Evans Shareholders whose names are on the register as at the close of business on 21 October 2016 will continue to be entitled to receive the interim dividend of 2.25 pence per MP Evans Share announced by MP Evans on 12 September 2016 for the six month period ended 30 June 2016 and which is to be paid on or after 4 November 2016 (the "Interim Dividend").



· Therefore, MP Evans Shareholders will receive, through the Offer Consideration and the Interim Dividend, in total, 642.25 pence per MP Evans Share (the "Offer Value"), valuing the entire issued and to be issued share capital of MP Evans at approximately £360.5 million.



· The Offer Value represents a premium of approximately:



o 51 per cent. to the Closing Price of 426.25 pence per MP Evans Share on 24 October 2016, being the last Business Day prior to the commencement of the Offer Period;



o 54 per cent. to the volume-weighted average Closing Price of 417.4 pence per MP Evans Share for the 30 days ended on 24 October 2016, being the last Business Day prior to the commencement of the Offer Period;



o 57 per cent. to 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;



o 51 per cent. to the volume-weighted average Closing Price of 426.0 pence per MP Evans Share for the three years ended on 24 October 2016, being the last Business Day prior to the commencement of the Offer Period; and



o 67 per cent to the implied equity value of MP Evans of £182.2 million, based on the Closing Price of ‎426.25 pence per MP Evans Share on 24 October 2016, being the last Business Day prior to the commencement of the Offer Period, adjusted for net debt of £5.4 million at MP Evans, as reported in its interim results for the half year period ended 30 June 2016, and the additional cash receipt on 21 July 2016 of £62.5 million arising from the disposal of its NAPCo business (less the associated special dividend of five pence per MP Evans Share paid on 17 August 2016), both of which KLKI expects to acquire on a pound-for-pound basis.



· The Offer Consideration values the entire issued and to be issued share capital of MP Evans at approximately £359.3 million.



· The Chief Executive Officer of KLK has in recent weeks held exploratory discussions with the Chairman of MP Evans which were followed on 11 October 2016 by a proposal in writing to the Board of MP Evans in respect of an indicative offer of 640 pence per MP Evans Share, plus the Interim Dividend of 2.25 pence per MP Evans Share. On 13 October 2016, this proposal was rejected by the Board of MP Evans. Nevertheless, the Board of KLK believes that MP Evans Shareholders should now have the opportunity to decide on the merits of its Offer.



· KLK believes its all-cash Offer is highly attractive for MP Evans Shareholders, representing a compelling value proposition with a high degree of certainty at a substantial premium to the current share price providing an opportunity to realise in full the value of their investment in the context of the low liquidity in the trading of MP Evans Shares.



· Further, KLK believes there to be strategic merit in synergising the operations of MP Evans with KLK's from a geographical and capabilities perspective. The management of MP Evans will also have opportunities to develop their careers within the larger organisation. Together, KLK and MP Evans should establish best practices for the further growth of both companies and enable the enlarged group to capitalise on economies of scale in the oil palm sector.



· The cash consideration payable pursuant to the Offer will be financed through an acquisition loan facility provided by The Hongkong and Shanghai Banking Corporation Limited.



· HSBC, as financial adviser to KLK and KLKI, is satisfied that sufficient cash resources are available to KLKI to satisfy in full the cash consideration payable to MP Evans Shareholders (and participants in the MP Evans Share Schemes) in the event of full acceptance of the Offer (which, for the avoidance of doubt, does not include the Interim Dividend, which is payable by MP Evans).



· KLK is incorporated in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad with a market capitalisation of approximately RM 25.9 billion (approximately £5.1 billion) as at 24 October 2016, being the last Business Day prior to the date of this announcement. KLK was started as a plantation company more than 100 years ago and plantations still remain its core business activity.



· The Offer is conditional upon, amongst other things, valid acceptances being received in respect of MP Evans Shares which, together with any MP Evans Shares acquired by KLKI and/or KLK or any other member of the KLK Group (whether pursuant to the Offer or otherwise) carry, in aggregate, more than 50 per cent. of the voting rights then normally exercisable at a general meeting of MP Evans.



· Appendix 1 to this announcement sets out the Conditions and further terms to which the Offer will be subject. The Offer does not require the approval of KLK's shareholders.



· If the Offer becomes, or is declared, unconditional in all respects and KLKI receives valid acceptances under the Offer in respect of MP Evans Shares which, together with any MP Evans Shares acquired, or agreed to be acquired, before or during the Offer by KLKI and/or any other members of the KLK Group, represent not less than 75 per cent. of the voting rights attaching to the MP Evans Shares, KLKI may procure that MP Evans will make an application for the cancellation of the admission to trading on AIM of the MP Evans Shares. In the event that cancellation of admission to trading does occur, it is likely to reduce significantly the liquidity and marketability of any MP Evans Shares in respect of which the Offer has not at such time been accepted.



· Neither KLK nor KLKI currently owns any MP Evans Shares as at 24 October 2016, being the last Business Day prior to the date of this announcement.



· The Offer Document, containing further information about the Offer, will be published, other than with the consent of the Takeover Panel, within 28 days of this announcement and will be made available on KLK's website at hxxp://www.klk.com.my/investor-relations/mpevans.

This summary should be read in conjunction with, and is subject to, the full text of this announcement (including the Appendices). The Offer will be subject to the Conditions and further terms set out in Appendix 1 to this announcement and to the full terms and conditions which will be set out in the Offer Document. Appendix 2 contains the bases and sources of certain information used in this summary and this announcement. Appendix 3 contains definitions of certain terms used in this summary and this announcement.

Enquiries:

KLK



David Chong

Teh Kwan Wey

Yap Miow Kien


[phone]

[phone]

[phone]

HSBC Bank plc



Oliver Smith

Rajeev Sahney

Alex Thomas

Nick Donald
[phone]

[traderabc] 25/10/2016 12:14

Indeed, any obvious reason? AEP has moved a little too on this.

[cwa1] 25/10/2016 11:51

Nice :-) AND unexpected.....

[bobdouthwaite] 03/11/2015 15:15

Underperformance of London-listed palm oil groups relative to their Asian peers and the prospects for takeovers. MPE gets a mention:
hxxp://www.agrimoney.com/news/share-malaise-lifts-prospect-of-london-palm-oil-group-deals--8962.html

[smackers prudentia] 29/12/2014 10:24

With the recent sell off and share price fall followed by a rebound in both Palm Oil & Cattle Prices this is starting to look interesting especially with take-over activity still high in the sector. PEG is only 0.57, and limited borrowing

Recent IC Article -- EIGHT GENUINE GROWTH BUYS
MP Evans

While palm oil producer MP Evans (MPE) has made it past the Genuine Growth screen's 3-month rising-forecasts test, the most recent revisions to brokers predictions have been downward due to weather-related woes. However, other external factors have put a more positive shine on the company's shares, namely the takeover of rival New Britain Palm Oil at an 85 per cent premium to its share price prior to the bid.

Broker Peel Hunt points out that the $20,000 per hectare value put on New Britain's plantations compares with a valuation of about $10,000 per hectare currently being applied to MP Evans' land. What's more, the New Britain bid is just the latest takeover in a wave of consolidation sweeping the sector. Spinning off an Australian cattle business could also aid sentiment towards Evans and the long-term outlook for its young estate is encouraging despite recent weather-related set backs.

Last IC View: Buy, 440p, 23 October 2014

[miss womble] 28/4/2014 13:50

For those of you interested and investing in the world's need to increase food production you may do much worse than have a look at Plant Impact. They have no debt, their research and development is going well and about to become profitable. I am not ramping just suggesting that you have a look at their forward plans. Happy investing MW

[trytotakeiteasy] 16/4/2013 16:00

looks overpriced to me...