KLK, Boustead Plantations' $243 mln stake deal falls through in Malaysia (updated)

Boustead Singapore

04/10/2023 13:29

* 
      Boustead will return 229.2 mln ringgit deposit to KLK
    

        * 
      Deal failure could weigh on M&A activities in Malaysia
    

        * 
      Boustead shares hit lowest in almost 2 months before
suspended  
    

  
 (Adds context in paragraph 5 and 6, and shares performance in
paragraph 9)
    By Poonam Behura and Yantoultra Ngui
       Oct 4 (Reuters) - Malaysian palm oil producer Kuala
Lumpur Kepong  KLKK.KL  on Wednesday said a 1.15 billion ringgit
($243.18 million) deal for it to acquire a 33% stake in smaller
rival Boustead Plantations  BOPL.KL  has been terminated.
    KLK, as the company is known, said a condition to finalise
the share acquisition will not be satisfied by the cut-off date
of Oct. 6, but did not give further details.
        Boustead will return a deposit sum of 229.2 million
ringgit to KLK as a result of the termination.         
    KLK had in August disclosed plans to take over Boustead
along with other top shareholders, in due course, in a deal
worth 3.47 billion ringgit.
    The falling through of the deal could weigh on merger and
acquisition activities in the Southeast Asia nation. 
        In August, Malaysian conglomerate Sime Darby  SIME.KL 
announced plans 
    to buy
     a majority stake in local industrial group UMW Holdings
 UMWS.KL  for 3.57 billion ringgit in a move that could
spearhead the country's electric vehicle sector.
  
        Shares of Boustead sank to their lowest in nearly two
months in the previous session, losing 13%, with the company
halting trading in its shares since Tuesday. Shares will resume
trade on Thursday, filings showed.
  
        Earlier in the day, Bloomberg reported citing its
sources that KLK was in discussions with Malaysia's military
pension fund - Lembaga Tabung Angkatan Tentera, which holds
majority interest in Boustead, to rework the deal.

($1 = 4.7290 ringgit)

 (Reporting by Poonam Behura in Bengaluru and Yantoultra Ngui in
Singapore; Editing by Nivedita Bhattacharjee and Andrea Ricci)
 ((Poonam.Behura@thomsonreuters.com;))