MP Evans says KLK offer 46% lower than implied equity value, makes divi pledge

Having commissioned an independent valuation of its assets, Indonesian palm oil plantation owner MP Evans said on Monday that the 740p per share offered by Kuala Lumpur Kepong, which it rejected on 15 November, is 46% lower than the group’s implied equity value of 1,082p.

Malaysia-based Khong & Jaafar, which specialises in the valuation of oil-palm estates and property, valued MP Evans' land assets at $665m.

KLK had sweetened its offer from 640p originally, but MP Evans rejected it again on the basis that it “very substantially undervalues the company”.

On Monday, the group said it intends to a pay a dividend, excluding special dividends of at least 15p per share for 2016 and 2017, which is a gain of at least 71% compared with those paid in respect of 2015.

On this basis, the final dividend for 2016, to be paid in June 2017, will be at least 12.75p per share.

“The board aims to continue its policy of maintaining or, where possible, increasing the level of MP Evans' annual dividend. The board also notes it has demonstrated its willingness to distribute surplus cash reserves to its shareholders. For instance, in the first half of 2016 a special dividend of 5 pence per share was declared following the sale of NAPCo, its Australian cattle business.”

At 1125 GMT, the shares were up 0.6% to 685p.