Ocean 21 Holdings Pte., Ltd., unit of PT Indofood Sukses Makmur Tbk (IDX: INDF) plans to establishes three new subsidiaries in Singapore as part of the company expansion - Photo by the Company

JAKARTA (TheInsiderStories) – PT Indofood Sukses Makmur Tbk (IDX: INDF), the business arm of the Salim Group, canceled takeover bid for Indofood Agri Resources Ltd (IndoAgri) after failing to get enough shareholder acceptances to reach an at least 90 percent stake, CIMB Bank said on behalf of the Indonesia-listed company in a filing to Singapore Stock Exchange (SGX) on Tuesday (06/25).

“The offer has lapsed and all offer shares tendered in acceptance of the offer will be returned to shareholders,” the company said in the filing.

Indofood Sukses Makmur had planned to take the company private, delisting it from SGX, to streamline the number of listed entities in its group structure.

In April, Indofood Sukses Makmur offered to acquire the rest of Singapore-listed Indofood Agri, it doesn’t already own. The takeover bid was raised to S$0.33 (US$0.45) a share from S$0.28 earlier this month.

At the time of the offer, the Indonesian company and its related parties controlled 74.53 percent of Indofood Agri, the filing said.

By the close of the offer Tuesday, shareholders unrelated to the offerer had tendered valid acceptances of 13.58 percent, with the total stake owned, controlled or agreed to be acquired reaching 88.08 percent, the filing said.

The offer was conditional on Indofood Sukses Makmur receiving acceptances of at least 90 percent of IndoAgri’s outstanding shares. Once the free float of the shares falls below 10 percent required a minimum threshold, Indofood Sukses Makmur would have been able to compulsorily acquire the remaining shares.

The company represented by the CIMB Bank Berhad in Singapore will return to the disclosure of information on time after the offer conditions have been fulfilled. If the offer conditions are met, the ownership level of the company group at IFAR will increase to more than 90 percent.

As known, INDF owns 74.34 percent of IFAR shares when bidding on the remaining IFAR shares and is listed on the Singapore Exchange Securities Trading Ltd.

This offer, according to Indofood management, applies to all IFAR shares other than those that have been held by the Company Group on the offering date. Accordingly, the offer will cover 25.66 percent of IFAR’ total shares.

Meanwhile, First Pacific Investments Ltd. and First Pacific Investment, which together owns 0.14 percent of IFAR shares, doesn’t accept the offer and will not sell the IFAR shares that they own. The two entities have the same controlling party as the company.

Based on the 2018 report, IFAR’s outstanding shares totaled 1.40 billion shares. Meanwhile, the ownership of the unit of Salim Group shares in IFAR is 1.04 billion shares.

Thus, the number of shares to be acquired is 358.14 million shares. When referring to the bid price, the funding for this share buyback is S$100.28 million or around Rp1.05 trillion ($72.92 million).

In the first quarter of 2019, recorded an income growth of 8.73 percent to Rp19.17 trillion from Rp17.63 trillion. In fact, the company’ net profit increased 13.5 percent to Rp1.35 trillion from Rp1.19 trillion.

Salim Group issuer also recorded a gross profit margin of 30.26 percent from 29.83 percent.

US$1 = S$1.37

Written by Lexy Nantu, Email: lexy@theinsiderstories.com