THE STAR ONLINE | Kuala Lumpur
CONGLOMERATE Sime Darby Bhd came into the spotlight again this week after it said the Papua New Guinea government had expressed an intention to increase its stake in New Britain Palm Oil Ltd (NBPOL) to 30% from 18% presently.
This led to some confusion about how this would impact Sime Darby’s ongoing buyout offer for NBPOL.
How can Sime Darby ensure that the PNG government gets the additional 12%, as Sime Darby doesn’t yet own any shares in NBPOL, considering that it only recently posted the offer document to the latter’s shareholders?
But that is missing the point: Sime Darby’s chief executive officer and president Tan Sri Mohd Bakke Salleh had said clearly on 9 October (when it first announced the planned takeover of NBPOL), that the ‘buy-in’ of the PNG government was crucial to the deal, making it a long-term partner in NBPOL.
Hence, Bakke had said that Sime Darby would be happy to have the PNG government raise its stake in NBPOL, a development which seems to be coming to fruition.
As far as the concern of where this additional 12% is going to come from, or whether this increase in shareholding by the PNG government would impact the buyout, the point to note is that for Sime Darby, the ideal situation would be to have a 100% acceptance of its buyout offer.
Subsequently, Sime Darby would then seek to provide the PNG government with that 30% equity in NBPOL on terms that are acceptable to both parties, considering that NBPOL is the largest corporation in the whole of PNG.
This is probably why Sime Darby has offered a rather generous offer to buy out NBPOL. Despite the seemingly high buyout price, NBPOL presents a game-changing chance for Sime Darby to embark on a new chapter in its plantation endeavours.
At least, that’s how Bakke and the Sime Darby board see it.