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For Olam I will do nothing to my holding. In time to come ofi may get listed and I will get ofi shares via distribution in specie from Olam shares. If the valuation is good, can sell or keep. Olam could sell ofi too then Olam really empty liao, and have to return all cash to shareholders and delist.
Olam to sell remaining stake in Olam Agri for US$2.6 billion, focuses on IPO of business unit ofi
OLAM is divesting its remaining stake in Olam Agri to Saudi Agricultural and Livestock Investment Company (Salic) for US$2.6 billion.
While the board has yet decided on the specific use of the proceeds, Olam&rsquo s co-founder and group chief executive officer Sunny Verghese said Olam would continue seeking &ldquo strategic options to unlock value&rdquo for the other two parts of its business &ndash ofi (Olam Food Ingredients) and the remaining Olam Group &ndash including the pursuit of an initial public offering for ofi.
Shares of Olam Group : VC2 +5.31%, which holds about 64.6 per cent of Olam Agri, jumped 5.3 per cent, or S$0.06, to close at S$1.19 on Monday (Feb 24).
The food and agri-business giant announced on Monday before the market open that it had entered into a conditional sales-and-purchase agreement with Salic to dispose of all its remaining shareholdings in Olam Agri in two tranches.
The first tranche involves 44.58 per cent of the stake, or 1.5 billion ordinary shares, in Olam Agri, which Salic will acquire for about US$1.8 billion. This implies an equity valuation of US$4 billion of the whole of Olam Agri.
After the first transaction, expected to be completed in the fourth quarter of 2025 and subject to Olam shareholders&rsquo and regulatory approvals, Salic&rsquo s stake in Olam Agri will be raised to a controlling 80.01 per cent, from the current 35.43 per cent.
Within three years of the completion of the first tranche, the group will sell the remaining 19.99 per cent stake in Olam Agri via a call/put option, which Verghese said would happen, without a doubt.
&ldquo The acquiring shareholders, based on their constraints, have decided that they will do this in two tranches, but there is no uncertainty or doubt about the second tranche,&rdquo he said, adding that Olam has secured an irrevocable and unconditional put to sell the remaining 19.99 per cent &ldquo without any risk to the valuation&rdquo .
Valuation at premium
The implied US$4 billion equity valuation of Olam Agri is 23 per cent higher than the US$3.3 billion market capitalisation (as of Feb 21) of the entire group, which currently consists of Olam Agri, ofi and the remaining Olam Group.
The valuation also reflects a 14 per cent premium to the US$3.5 billion valuation at which Salic first acquired a 35.43 per cent stake in Olam Agri in 2022. It represents a 3.47 times price-to-book value to Olam Agri&rsquo s book value of US$1.2 billion as at end-2023.
On top of a secured base valuation on the &ldquo irrevocable and unconditional put&rdquo , the second tranche will be exercised with closing adjustments and a 6 per cent compound interest per annum.
&ldquo The compounded closing valuation on completion (of the second tranche) will be almost 1 billion dollars additional,&rdquo Verghese highlighted in a briefing on Monday.
Use of proceeds
Including the initial sale of 35.43 per cent stake in Olam Agri in 2022, Olam would have raised total gross proceeds of US$3.9 billion, and accreted US$2.7 billion to its equity reserves, from the 100 per cent divestment of Olam Agri.
Verghese said that the board would consider various factors, including the level of future earnings and cash flows, before deciding on the specific use of the proceeds.
They may be channelled into debt repayment, right-sizing the capital structure of Olam and ofi, as well as the issuance of a possible one-time special dividend distribution, said the group in its bourse filing.
Verghese added that after the divestment of Olam Agri, the group can focus on unlocking value for the remaining businesses, including an IPO for ofi and other strategic options for the same objectives.
Reasons for sale
On Mar 6, 2023, Olam proposed to demerge Olam Agri business from the group. It had also been working towards an IPO of Olam Agri in Saudi Arabia, which was delayed because the necessary regulatory approvals had not yet been obtained.
Verghese noted that Saudi Arabia-based Salic also intends to list Olam Agri and the Saudi market continues to be an attractive place to do so.
&ldquo If you are 100 per cent Saudi-owned companies, you don&rsquo t need all those regulatory approvals that we were struggling with as a foreign company,&rdquo he noted.
Verghese said the company would evaluate Olam Agri&rsquo s operations in Singapore, as it gets closer to the IPO.
Financial impact
Assuming that both tranches were completed on Dec 31, 2023, Olam&rsquo s net tangible asset per share would rise to S$1.9738 from S$1.2465. Net gearing would have fallen to 0.51 times from 1.73 times.
The group&rsquo s earnings per share (EPS) would have fallen to S$0.0203 from S$0.065, assuming both tranches were completed on Jan 1, 2023. Operational EPS would have fallen to S$0.0677 from S$0.1123.
Operational EPS excludes exceptional items, which mainly comprised a lower crop yield of Australia almonds and group reorganisation costs.
Both Olam and Salic agreed to allow a dividend payout from Olam Agri in respect of profits generated in the second half of 2024, of up to a maximum of US$110 million.
Olam Agri is one of Olam&rsquo s three operating groups formed in early 2020 under a reorganisation plan. In 2023, Olam Agri generated volumes in excess of 39 million tonnes, revenues of S$31.3 billion, as well as earnings before interest and tax of S$967.7 million.
I barely remember.. at one pt.. no companies dare to do biz except cash terms.. lol
Price momentum quite lousy even with the news. OLAM could be looking to sell off all their assets, become a cash company and delist. Practicaly only left with Ofi after Olam Agri. If this pan out, market do not see the sales price exceeding its NAV and relunctant to push the share price.
Chiong la
Mgt had for years repeated it's objective of strategic reorganization is to unlock value for its shareholders. If we're still not getting anything out of this exercise, what value is there to unlock? Have faith....hehe and dyodd.
alanchee ( Date: 24-Feb-2025 16:51) Posted:
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Gain of 2.43B translate to about 64cents per lot for this Tranche, base on 3.95B shares issue. Hope mgmt will be generous to at least distribute 60% to reward SH
FATABA ( Date: 24-Feb-2025 10:02) Posted:
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Olam ah
Definitely a good deal? but Will Olam mgmt give back to shareholders or keep it this time?
Once this deal is fully sealed , it unlock over $2B gain or aro 36c a share ( per some reports)
Pls DYODD .
Pls DYODD .
FATABA ( Date: 24-Feb-2025 08:48) Posted:
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https://www.invest-alpha.sg/view& id=792
It's a done deal. Below 1.20 looks very tempting...dyodd
Wow that is a g00d deal . Should see Olam rising . Dyodd
Saudi Agriculture & Livestock Investment Company (SALIC) to acquire a 44.58% stake in Olam Agri Holdings (Olam Agri) for approximately US$1.78 billion (S$2.35 billion) (Tranche 1). Upon completion of Tranche 1, SALIC will own a controlling 80.01% stake in Olam Agri. Olam Group Limited (OGL) will, upon the completion of the sale of Tranche 1, have a put option to sell its remaining 19.99% stake in Olam Agri to SALIC (Tranche 2) which is exercisable on the third anniversary of completion of the sale of Tranche 1 at the Closing Valuation plus 6% IRR. SALIC will, upon the completion of the sale of Tranche 1, have a call option to buy the 19.99% stake in Olam Agri on or before the third anniversary of the completion of the sale of Tranche 1. Implied 100% equity valuation for Olam Agri of US$4.00 billion (S$5.28 billion) is 23% higher than the US$3.25 billion (S$4.30 billion) market capitalisation of OGL, which currently consists of Olam Agri, ofi and the Remaining Olam Group. The 100% equity valuation of US$4.00 billion reflects a 14% premium to the US$3.50 billion valuation at which SALIC first acquired a 35.43% stake in Olam Agri in December 2022, which closed at a total final consideration of US$1.29 billion (inclusive of post-closing adjustments in H1 2023). This valuation also represents a 3.47x price-to-book value multiple to Olam Agri' s book value of US$1.15 billion as at December 31, 2023. On completion of the sale of Tranche 1, OGL would realise an estimated gain on disposal of US$1.84 billion (S$2.43 billion) which will accrete to the equity reserves of OGL. OGL would raise estimated total gross cash proceeds of US$2.58 billion (S$3.41 billion) from the sale of Tranche 1 and 2. OGL continues to hold a 100% interest in ofi and the Remaining Olam Group. It will now focus on seeking strategic options to unlock value for the Remaining Olam Group businesses and ofi, including the pursuit of an ofi IPO.
Saudi Agriculture & Livestock Investment Company (SALIC) to acquire a 44.58% stake in Olam Agri Holdings (Olam Agri) for approximately US$1.78 billion (S$2.35 billion) (Tranche 1). Upon completion of Tranche 1, SALIC will own a controlling 80.01% stake in Olam Agri. Olam Group Limited (OGL) will, upon the completion of the sale of Tranche 1, have a put option to sell its remaining 19.99% stake in Olam Agri to SALIC (Tranche 2) which is exercisable on the third anniversary of completion of the sale of Tranche 1 at the Closing Valuation plus 6% IRR. SALIC will, upon the completion of the sale of Tranche 1, have a call option to buy the 19.99% stake in Olam Agri on or before the third anniversary of the completion of the sale of Tranche 1. Implied 100% equity valuation for Olam Agri of US$4.00 billion (S$5.28 billion) is 23% higher than the US$3.25 billion (S$4.30 billion) market capitalisation of OGL, which currently consists of Olam Agri, ofi and the Remaining Olam Group. The 100% equity valuation of US$4.00 billion reflects a 14% premium to the US$3.50 billion valuation at which SALIC first acquired a 35.43% stake in Olam Agri in December 2022, which closed at a total final consideration of US$1.29 billion (inclusive of post-closing adjustments in H1 2023). This valuation also represents a 3.47x price-to-book value multiple to Olam Agri' s book value of US$1.15 billion as at December 31, 2023. On completion of the sale of Tranche 1, OGL would realise an estimated gain on disposal of US$1.84 billion (S$2.43 billion) which will accrete to the equity reserves of OGL. OGL would raise estimated total gross cash proceeds of US$2.58 billion (S$3.41 billion) from the sale of Tranche 1 and 2. OGL continues to hold a 100% interest in ofi and the Remaining Olam Group. It will now focus on seeking strategic options to unlock value for the Remaining Olam Group businesses and ofi, including the pursuit of an ofi IPO.
Yeah !
superstartup ( Date: 10-Feb-2025 09:33) Posted:
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More or less covered, as mentioned in the SPA that 110m from Olam Agri will be committed to pay the dividend, this amount plus profits from the remaining OLAM group should match last year' s 4 cents dividend for 2H24.
yuhanooi ( Date: 24-Feb-2025 07:29) Posted:
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And still get dividends? Got 4 cts?
Olam sold 44% to be completed in Q4 2025,
and we will have to wait 3 more years to sell the remaining 20% stake in Olam Agri?
and we will have to wait 3 more years to sell the remaining 20% stake in Olam Agri?
https://links.sgx.com/FileOpen/24Feb2025_News%20Release_Proposed%20Sale%20of%20Shares%20in%20Olam%20Agri%20Holdings.ashx?App=Announcement& FileID=833947
It' s happening now. Sale price is 23% higher than current OLAM' s entire market cap! Let' s see how the market react.
It' s happening now. Sale price is 23% higher than current OLAM' s entire market cap! Let' s see how the market react.
steady. ramping up...
Just now one mouth over 400 lots eaten up at 116