Indofood Agri: Indo newspapers say Company to offer 20% of SIMP to public, with listing on the Indo Stock Exchange tentatively scheduled for May/Jun ’11. Underwriters are Mandiri, Kim Eng and Deutsche. Once SGX has given its approval, the Company will release a circular to sh/h on the proposed spin off. At least 70% of sh/h support is needed.
Recall, SIMP holds essentially all of IndoAgri’s operations, and is 90% owned by the latter…
A separate listing of SIMP may entail a holding-company discount being attached to IndoAgri. Also, the lack of rationale for the proposed listing by IndoAgri mgt raises uncertainty amongst investors. This may explain the recent underperformance of IndoAgri (-25% since peak in early Jan ’11) vs Golden Agri (-17%).
CLSA yday upgraded FY11 avg CPO price estimate to RM 3400/ton. Reiterates Buy with $2.85 TP.