Shares of IJM Plantations Bhd (IJMP) jumped 58 sen or 23.58% to RM3.04, recording the highest level in three and a half years in this morning's trading session.
The increase was supported by the acquisition of IJMP's 56.2% equity by Kuala Lumpur Kepong Bhd (KLK) at RM1.53 billion or RM3.10 per share.
At 11.20am, the counter's shares were up RM3.02, up 56 sen or 22.76%.
At RM3.02, the market capitalization of the counter is worth RM2.17 billion.
The counter, which was the most profitable counter this morning, saw 13.55 million shares traded.
Meanwhile, KLK shares declined 8 sen or 0.37% to RM21.68 at 11.23am, after jumping 36 sen or 1.65% to RM22.12 during the early trading session.
The market capitalization of the counter is worth RM23.52 billion based on its latest share price of RM21.68.
According to Hong Leong Investment Bank (IB) analyst Chye Wen Fei in a note today, KLK's offer price is reasonable for IJMP shareholders given the "lukewarm" price sentiment towards plantation stocks, due to environmental, social and corporate governance (ESG), adding that the price of crude palm oil (CPO) has soared and the offer price represents a premium of 18.8% to its target price for IJMP.
He maintained a 'buy' recommendation for IJMP with a higher target price of RM3.10 compared to RM2.61 previously, in line with KLK's takeover offer price.
In the meantime, said MIDF Research, the offer price is reasonable given the price of CPO which has reached RM4,000 per tonne and is the highest level of all time.
"We are of the view that the deal is appropriate for KLK to acquire an interest in IJMP and attractive enough to be accepted by the IJMP minority if the agreement develops into a mandatory offer for other IJMP shareholders," he said.
MIDF also maintained a ‘buy’ recommendation for IJMP with an unchanged target price of RM2.62.
