Trading Restrictions Imposed on Boustead Plantations Due to Share Price Decline

Trading activities involving proprietary day trading (PDT) and intraday short selling (IDSS) of $BPLANT / 5254 (BOUSTEAD PLANTATIONS BERHAD) shares have been temporarily suspended for the remainder of Monday. This suspension was triggered by a decline in the last done price, exceeding 15 sen or 15% of the reference price. The resumption of short selling under IDSS is scheduled for the following trading day, Tuesday, Oct 3, 2023, at 8.30 am," announced Bursa Malaysia in a filing on Monday.

What Led to the 15% Drop in Share Price in a Single Day?

Let's revisit the events that contributed to BPLANT's share price skyrocketing by 137.98% from its low on June 9 to its peak on August 28.

In mid-June, The Edge Malaysia reported that $BSTEAD / 2771 (BOUSTEAD HOLDINGS BERHAD) was exploring the possibility of selling its stake in BPLANT, attracting interest from several companies, including $YTL / 4677 (YTL CORPORATION BERHAD), Wilmar International, $IOICORP / 1961 (IOI CORPORATION BERHAD) , and $KLK / 2445 (KUALA LUMPUR KEPONG BERHAD). However, just a day later, on June 20, BSTEAD clarified that it had not entered into any agreement to sell its BPLANT shares. Initially, BSTEAD held a 57.42% stake in BPLANT, while LTAT owned 10.59%. Following LTAT's privatization of BSTEAD, its stake in BPLANT increased to 68%.

On August 24, it was reported that KLK was in the process of acquiring a 33% stake in BPLANT from LTAT and intended to launch a mandatory general offer (MGO) to privatize BPLANT at a price of RM1.55. This news drove BPLANT's share price to a record high of RM1.37 on August 23.

On September 11, KLK, BSTEAD, and LTAT agreed to extend the cut-off date for their strategic collaboration agreement (SCA) to September 22. Additionally, on September 18, KLK acquired an additional 1.34 million BPLANT shares from the open market. The disposal of 33% of BPLANT shares by BSTEAD also received support from the Minister of Defense.

However, the cut-off date for the proposed disposal of a 33% stake in BPLANT by LTAT has been extended for the second time, now set for October 6.

So, is the repeated extension of these agreements the reason for the share price drop, as investors may be uncertain about the deal's success? Or could the share price decline be related to KLK's open-market share disposal due to pessimism about the deal? Share your thoughts below.