Hot stock: Olam surges to record high on potential agribusiness stake sale

SHARES of Olam Group touched a new record price after the group announced that a state-owned Saudi investment firm had made a non-binding indicative offer for the group’s remaining stake in Olam Agri.

As at 1.36pm on Friday (Nov 1) the counter jumped 16.8 per cent or S$0.18 to S$1.25, its highest share price since September 2023. The last time Olam nearly reached such a level was when it hit an intra-day high of S$1.24 on Aug 13, 2024.

It later eased to trade at S$1.21 by 3.47pm, up S$0.14 or 13.1 per cent, with 12.1 million shares transacted.

No married deals were recorded based on ShareInvestor data.

Olam’s share price movements come after the group said it was exploring the sale of its remaining stake with appointed advisers to Saudi Agricultural & Livestock Investment Company (Salic), a unit of Saudi Arabia’s Public Investment Fund.

Salic currently holds a 35.4 per cent minority stake in Olam Agri after investing US$1.24 billion in the unit. The deal was completed in December 2022, and was said to value Olam Agri at US$3.5 billion at the time. 

Olam Group, which continues to hold the remaining 64.57 per cent stake, emphasised that no definitive terms or formal legal documentation have been agreed upon between the parties to date.

“There is no certainty that a sale of the company’s stake in the Olam Agri business will proceed or will materialise,” it added.

Olam’s statement was made in response to an Oct 31 article published by Bloomberg, revealing that Salic was in advanced talks with the group on the potential sale.

Citing sources familiar with the matter, Bloomberg said the deal was estimated to place Olam Agri at a valuation of about US$4 billion.

Bloomberg’s sources also noted that Olam’s share sale preparations since last year, for its potential listing of the agribusiness unit in Singapore and Riyadh, had stalled.

Since it ceased trading as Olam International and re-listed as Olam Group in March 2022, the company has been working on plans to spin off its two business units, Olam Food Ingredients and Olam Agri.

In May 2023, Olam said its proposed initial public offering (IPO) of Olam Agri – originally slated to be completed by H1 that year – would be delayed as the necessary regulatory approvals had yet to be obtained.

“Whilst the company focuses on completing the discussions for the aforementioned potential sale, the company will also continue to monitor the various conditions guiding its decision in relation to the IPO and concurrent demerger for Olam Agri,” said Olam in its Nov 1 response.  

Shares of Olam were trading S$0.11 or 10.3 per cent higher at S$1.18 as at the midday trading break on Friday.