Felda Global Ventures Holdings Bhd. (FGVH), the world’s third-largest operator of palm oil plantations, raised about 10.4 billion ringgit ($3.3 billion) in the biggest initial public offering since Facebook Inc. (FB), said three people with knowledge of the matter.
The Kuala Lumpur-based company priced shares to institutional investors at 4.55 ringgit each, said the people, asking not to be identified as the information is confidential. Felda Global had marketed the shares at 4 ringgit to 4.65 ringgit. Demand for shares from fund managers exceeded supply by more than 29 times at that price, two of them said.
A statement will be made in a few days, Felda Global spokeswoman Izan Hussain said by phone.
Malaysia has weathered a slump in initial share sales better than markets including Hong Kong. The benchmark FTSE Bursa Malaysia KLCI Index has withstood a global stocks selloff, rising 3 percent this year. Companies including Graff Diamond Corp. have scrapped or delayed IPOs in Hong Kong in the past two weeks as Europe’s economic turmoil sapped demand for new equity.
“Felda is in a sweet spot because it is a large offering in a Malaysian context with a very cash-rich base of investors,” said Abdul Jalil Abdul Rasheed, who helps manage $3 billion as chief executive officer of Aberdeen Islamic Asset Management Sdn. in Kuala Lumpur. “We see other IPO markets being weak, but Malaysia has pulled through.”
Felda Global is selling $1.1 billion of shares to 12 so- called cornerstone investors, including the country’s biggest pension funds, according to a term sheet for the deal. Those buyers have pledge to hold the shares for a minimum 180 days in return for guaranteed allocations, the document showed.
The plantations group manages estates for the Federal Land Development Authority, a Malaysian government agency. It has about 355,864 hectares (878,984 acres) of plantations in Malaysia in addition to land in Indonesia. The company also has palm oil refining businesses in China, Indonesia, Turkey and South Africa, according to its share sale prospectus.
The IPO is the Southeast Asian nation’s biggest since Petronas Chemicals Group Bhd. (PCHEM) raised a record 12.8 billion ringgit in 2010, according to data compiled by Bloomberg. Facebook, the world’s largest social-networking company, completed a $16 billion IPO last month. Its shares have fallen 28 percent from the offer price.
IHH Healthcare Bhd., Asia’s biggest hospital operator, secured investors including AIA Group Ltd. this week for a $2 billion IPO in Kuala Lumpur, people familiar with the matter said June 12.
Billionaire T. Ananda Krishnan is considering a $1.5 billion offering for Malaysian pay-TV broadcaster Astro All Asia Networks Plc later this year, a company official said in March. Malakoff Bhd., the country’s largest independent power producer, is inviting proposals from banks to raise about $1 billion, two people with knowledge of the matter said today.
Malayan Banking Bhd., CIMB Investment Bank Bhd. and Morgan Stanley are managing Felda Global’s IPO as joint global coordinators, according to the prospectus. JPMorgan Chase & Co. and Deutsche Bank AG are also involved.
To contact the reporters on this story: Chong Pooi Koon in Kuala Lumpur at email@example.com; Joyce Koh in Singapore at firstname.lastname@example.org; Chan Tien Hin in Kuala Lumpur at email@example.com