PETALING JAYA: Hap Seng Plantations Holdings Bhd has terminated its buyout of Kretam Holdings Bhd as the due diligence results of Kretam were unsatisfactory and unacceptable.
"Accordingly, the company has exercised its rights pursuant to Clause 8.4 to terminate the SSAs (share sale agreements) with immediate effect, with which the company will not extend the proposed mandatory general offer for all the remaining Kretam shares not already owned by the company and parties acting in concert with it, if any, for a cash consideration of 92 sen per Kreatam share," said Hap Seng Plantations in a filing with the stock exchange.
To recap, Hap Seng Plantations had on February 21 acquired a 55% stake in Kretam for RM1.18 billion or 92 sen per share from Kretam CEO Datuk Lim Nyuk Sang @ Freddie Lim and Santraprise Sdn Bhd, triggering the 33% mandatory takeover offer threshold.
The buyout was to see Hap Seng's total plantation landbank and planted area increasing 23,865ha or 59.2% and 19,623ha or 54.3%, respectively. It would have also seen Hap Seng venture into the downstream plantation industry.
Shares of Hap Seng Plantations and Kretam fell 7 sen or 3% and half a sen or 0.7% to close at RM2.29 and 69.5 sen, respectively.