Malaysian plantation firm Felda Global Ventures Holdings Bhd (FGV) has offered to pay RM1.21 billion (US$378.84 million) for an unlisted planter, as it seeks to boost land assets and palm oil output after its listing last year.

FGV told the stock exchange yesterday it will take over 8.65 million Pontian United Plantations shares at RM140 per share. Pontian owns about 40,000 acres of oil palm estates in Malaysia’s top growing state of Sabah on Borneo island.

The purchases would be funded by bank borrowings and proceeds from its IPO. FGV had a US$3.1 billion listing in 2012, at the time the largest in the world after Facebook’s IPO, and had said it planned to use the funds to expand in South-East Asia and Africa.

FGV said the offer price for Pontian represents a price-earnings multiple of about 21.8 times based on the average earnings per share of Pontian of RM6.43 for 2011 and 2012.

The high price-tag for Pontian signals soaring costs in Malaysia, the world’s second largest producer of palm oil, as land for plantations grow more scarce.

FGV shares dropped 0.2 percent to RM4.50 per share, underperforming the broader market.

- Reuters