KUALA LUMPUR: Malaysian construction group IJM Corporation Bhd has accepted Kuala Lumpur Kepong Bhd's (KLK) 1.53 billion ringgit (US$372.63 million) cash offer for its entire stake in its palm oil plantation business, a stock exchange filing on Friday showed.
Plantation giant KLK proposed acquiring IJM Corp's 56.2per cent stake in IJM Plantations Bhd in a letter on Wednesday.
IJM Corp said it has decided to enter into a definitive share sale and purchase agreement with KLK.
It said the disposal enables it to immediately realise the value of its investment, considering the illiquidity of IJM Plantations shares.
It said it expects to record a pro forma gain of approximately 699.89 million ringgit.
The disposal is in line with its strategic objective of streamlining its businesses to focus on construction, property development, infrastructure concessions as well as manufacturing of building materials, it said.
"The recent strong (crude palm oil) price environment and good showing by plantation companies have presented an opportune window of divestment," it said.
Palm oil prices have been rising steadily over the past year and hit a record high last month.
Upon execution of the agreement, KLK is obliged to extend a mandatory general offer to acquire the remaining IJM Plantations shares it does not already own.
(US$1 = 4.1060 ringgit)
(Reporting by Liz Lee; editing by Jason Neely)