New Britain Palm Oil directors reject takeover offer

06-Aug-2013 - Last updated on 07-Aug-2013 at 10:30 GMT

New Britain Palm Oil’s independent directors have urged shareholders to reject an unsolicited takeover bid from Kulim, which already owns a 50% stake in the company.

The UK-listed palm oil processor said that “the negative aspects of the Offer far outweigh any advantages”, in a statement issued today (Wednesday). The directors added that the offer was “not fair or reasonable” and undervalued its shares by more than 15%.

In addition, they said the offer could reduce the company’s liquidity and risk delisting from the London Stock Exchange.

“Accordingly, the independent directors of NBPOL recommend that the offer be rejected,” they wrote.

However, they admitted that the bid of 550p per share did offer a premium on the current market price and gave shareholders an opportunity to sell at least some of their shares at a time when trading in the stock has been slow and highlights market undervalue.

NBPOL shares stood at 470p at the close of trade on Tuesday. The share price has ranged from 355p-565p over the past year.

Reporting its interim results to June 30 on Tuesday, the company’s CEO Nick Thompson said: "The Group's operational results for the first half of 2013 were disappointing as compared to the first half of 2012.”

Revenues fell in the six-month period from $366.1m to $308.6m, and it reported pre-tax profits of $14.1m compared with $63.6m a year earlier.

The company processes certified sustainable, traceable ingredients grown in Papua New Guinea and the Solomon Islands.