MP Evans soars on hostile Malaysian takeover offer

Shareholders in Indonesian palm oil plantation owner MP Evans have received a 640p takeover from Kuala Lumpur Kepong (KLK), though the AIM-listed company's board has rejected the terms of the deal.

Malaysia Stock Exchange-listed KLK has made a cash offer of 640p per share, with existing shareholders also due to receive the interim dividend of 2.25p per share, meaning the total offer is worth 642.25p a share and values Evans at roughly £360m.

At that price the offer is around 51% higher than the closing price on Monday and a similar premium to the 12-months and three-year volume-weighted average.

The Evans board, which in September's first-half results flagged a recent recovery in palm oil prices, rejected the proposal on 13 October, KLK said.

"Nevertheless, the board of KLK believes that MP Evans shareholders should now have the opportunity to decide on the merits of its offer," it said in the statement.

KLK said the all-cash offer represents "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".

Furthermore, KLK maintained there would be "strategic merit" in bringing the two companies together from cost savings and economies of scale, while also making a play to management by saying they would "have opportunities to develop their careers within the larger organisation".