SINGAPORE: On Monday, Feb 24, Olam Group announced that it will sell its remaining 64.57% stake in Olam Agri to state-owned Saudi investment firm Saudi Agriculture & Livestock Investment Company (SALIC).
The company will first sell its 44.58% stake, or 1.51 billion shares, for around US$1.78 billion (S$2.35 billion). This will raise SALIC’s stake in Olam Agri to 80.01%. After this sale, Olam Group has the option to sell its remaining 19.99% stake in Olam Agri to SALIC 3 years later. The price will then be based on a base value of US$799.6 million, plus US$197,162 per day from Jun 1 until the agreed completion date, along with a 6% internal rate of return, as reported by The Edge Singapore.
The sale puts Olam Agri’s 100% equity valuation at US$4 billion, which is 14% higher than its US$3.5 billion valuation in Dec 2022 when SALIC bought a 35.43% stake for US$1.29 billion.
Olam Group said Olam Agri’s full valuation is 23% higher than its market capitalisation of US$3.25 billion, which currently consists of Olam Agri, Olam Food Ingredients, and the remaining Olam Group.
Selling the 44.58% stake is expected to bring Olam Group a gain of US$1.84 billion. The valuation is 3.47 times book value per share to Olam Agri’s book value of US$1.15 billion.
Olam Group first announced plans to separate Olam Agri in March 2023 and was working towards an initial public offering (IPO) on the Singapore Exchange’s Mainboard. It was also looking at a possible listing on the Saudi Arabia Stock Exchange. However, in May 2023, the company delayed the IPO and demerger, saying it was still waiting for regulatory approvals.
In Nov 2024, Olam received a non-binding offer from SALIC that valued Olam Agri at about US$4 billion. /TISG