Pinehill Valuation in Question, What about ICBP Acquisition?

The conditional sale and purchase agreement between PT Indofood CBP Sukses Makmur Tbk (ICBP), Pinehill Corpora Limited, and Steele Lake, has drawn criticism. The deal’s worth is around US$ 2.99 billion or equivalent to Rp 41.56 trillion-with the assumption that the exchange rate of Rp 13.901 per US dollar. According to Reuters, three investors at First Pacific Investment Management Limited considered the acquisition agreement’s price was too high. First Pacific holds a 50 percent stake in PT Indofood Sukses Makmur Tbk (INDF), trading on the Hong Kong Stock Exchange. Meanwhile, INDF is ICBP’s controlling shareholder with 80.53 percent ownership.

Gerardo Zamorano, a director at Brandes Investment Group, who owns eight percent of First Pacific’s shares, said that the price of the acquisition agreement would be the biggest challenge to get the shareholders’ approval. “From a strategic perspective, we believe that Pinehill is an attractive asset. But you have a question of valuations, and then you have a question of process and governance, which at the Indonesian level, we think, there is room for improvement,” Zamorano revealed to Reuters.

Hong Kong’s rules do not recognize Anthoni Salim and his colleagues as First Pacific’s independent shareholders. Therefore, they cannot use their rights to vote at the extraordinary shareholder meeting (RUPSLB) on Friday, July 17, 2020. The ratification of the Pinehill acquisition agreement requires the most votes to run the plan smoothly.