Indofood Agri to buy Indonesian palm oil firm

Singapore, May 26: Singapore-listed Indofood Agri Resources Ltd. said on Saturday it plans to buy Indonesian plantation firm PT London Sumatra Tbk (Lonsum) for up to S$1.6 billion ($1.05 billion).

Indofood Agri, the plantation arm of Indonesia's largest instant noodle maker PT Indofood Sukses Makmur Tbk , said it agreed to buy Lonsum shares at 6,500 rupiah each from parent First Durango Singapore Pte. Ltd, Eddy Sariaatmadja, a Lonsum commissioner, and convertible notes due 2009 from fund manager Ashmore Investment Management Ltd.

In a statement to the Singapore Stock Exchange, Indofood Agri said that after buying these vendor shares it would launch an offer for the rest of Lonsum at 6,900 rupiah per share.

It said the total cost could be 9.1 trillion rupiah, or around S$1.6 billion.

Lonsum, one of the oldest plantation firms in Indonesia and focused on palm oil, had said on Thursday its parent was in talks to sell a majority stake in the company.

Both Indofood and Lonsum shares trading in Jakarta and Indofood Agri shares in Singapore were suspended on Thursday.

Shares in London Sumatra closed on Wednesday at 6,400 rupiah, valuing the company at about $800 million. Indofood Agri's market capitalisation is about $1.1 billion.

Reuters