KUALA LUMPUR: IOI Corp Bhd's RM1 billion takeover offer of Unico-Desa Plantations Bhd is fair based on the latter's enterprise value of about RM73,660 to RM74,500 per hectare, analysts said.
They said the prevailing market price for brownfield estates in Sabah ranges from RM55,500 to RM75,000 per hectare.
Public Investment Bank said comparing to the recent Felda Global Ventures Holdings Bhd's offer price of RM74,794 per hectare for Pontian United Plantations Bhd, IOI's enterprise value of RM74,524 per hectare for Unico is deemed fair.
"The offer price of RM1.17 per Unico share values the acquired company at financial year 2013 price-earnings ratio of 39.6 times, or 37.6 per cent higher than its net tangible asset of 85 sen."
"The acquisition, should it proceed, will increase IOI's net borrowing position to RM5.3 billion," it said.
MIDF Research said the purchase price of RM1.17 per Unico-Desa share translates into RM73,660 per hectare describing it as fair.
The firm believes the takeover will benefit IOI in terms of production growth.
Therefore, it has retained its "neutral" tag on the company with a target price of RM5.67.
IOI shares yesterday closed two sen lower to RM5.37, while Unico-Desa shares dropped two sen to RM1.16.