KUALA LUMPUR (Dec 23): Datuk Seri Nazir Razak, chairman of CIMB Group Holdings Bhd and younger brother of Prime Minister Datuk Seri Najib Razak, today questioned Federal Land Development Authority's (Felda) acquisition of a 37% stake in Indonesia's PT Eagle High Plantations Tbk for US$505.4 million (RM2.26 billion).

Nazir posted a black-and-white photograph on his Instagram this evening of his father — the late prime minister Tun Abdul Razak Hussein – addressing a group of people, presumably early Felda settlers.

The photograph was uploaded on Instagram together with the message: "Felda announced buying 37% of Eagle High for US$505m or 580 rupiah per share. Eagle High's average price in November was 212 rupiah per share, so a 173% premium for a non-control stake. I hope the board will fully justify the acquisition & valuation even though the deal is no longer made by listed FGV (Felda Global Ventures Bhd)."

Garnering 173 “likes” at the time of writing, one of Nazir’s followers wrote, "Pity to the settlers. Felda no longer looking after the poors (sic) but only serve the elites."

The Felda land schemes developed by Tun Abdul Razak more than 50 years ago were a major contribution of the second prime minister to society. It was reported that the schemes had provided a comfortable life to thousands of poor people recruited as settlers.

Earlier today, Felda said in a statement that the acquisition was in line with its aim to become one of the world's largest palm oil groups.

Felda's subsidiary, FIC Properties Sdn Bhd (FICP) had inked the sale and purchase agreement with the Rajawali Group to acquire the significant stake in Jakarta-listed Eagle High, which is also one of Indonesia's largest palm oil companies.

“The acquisition will mean that Felda will, among others have access to more than 320,000ha of land bank in Indonesia (about 4.4 times the size of Singapore), including more than 125,000ha of planted nucleus,” Felda said.

According to the group, further details of the acquisition could not be provided at this moment as the SPA is subject to approval by the relevant authorities in Malaysia and Indonesia.

Shares in PT Eagle High closed at 298 rupiah today, giving it a market capitalisation of 9.14 trillion rupiah (RM3.04 billion).

In a separate filing with Bursa Malaysia today, FGV said all negotiations on the proposed Eagle High stake buy have been mutually terminated.

To recap, FGV, a 20%-owned unit of Felda, had in June last year announced plans to purchase a 30% interest in Eagle High for US$632 million in cash and a further 7% stake via an issue of 95 million new FGV shares worth US$48 million, which gave the deal a total valuation of US$680 million or RM2.89 billion then.

FGV had reportedly been advised by its bankers, JPMorgan and Bank of America, to opt out of the deal as the US$680 million price tag was seen as too high for the 37% Eagle High stake.