Wilmar International Limited (Wilmar) has make an offer to Benso Oil Palm
Plantation Ltd (BOPP) (listed in Ghana Stock Exchange) acquire at least
58.45% of the entire issued ordinary share capital. Unilever Ghana
Limited, which holds in aggregate 58.45% of the issued share capital of
BOPP, has provided the Company with a written irrevocable undertaking to
accept the Proposed Offer in respect of its BOPP shares.

Wilmar Africa has also entered into an agreement with Unilever Ghana
Limited to acquire the “Frytol” cooking oil brand and its oil processing
activities in Ghana.

Impact on Stock

The offer price for the stakes in BOPP is at GHS0.83/share or for a total
consideration of US$20.3m assuming 100% stakes in BOPP. The offer price is
5.1% above BOPP’s last closing price of GHS0.79/share (up from GHS0.66 @
21 May 10).  No information on purchase price disclosed with regards to
the acquisition of “Frytol” cooking oil brand and oil processing from
Unilever Ghana. Financial data for BOPP was not available for comment on
valuation.

BOPP is involved in growing of oil palm and other agricultural products,
processors of oil palm fruits to produce palm oil and palm kernels and
dealers and traders in palm oil, palm kernels and other agricultural
products.  BOPP is in the Mpohor Wassa East District in the Western Region
of Ghana where the plantation is 42km from Takoradi.

These acquisitions of BOPP, cooking brand and oil processing activities in
Ghana are consistent with the Wilmar’s plans to develop a fully integrated
oil palm business in the emerging markets.  Wilmar also owns other oil
palm plantations in Africa through its joint ventures in Uganda and Ivory
Coast. Thus the downstream acquisition would be able to complement its
upstream investment in Uganda and Ivory Coast.

Wilmar investment in Africa is to capture the domestic market, which is
not new to palm oil market. Oil palm was originated from West Africa and
palm oil is widely used as cooking oil in West Africa due to its cost
competitiveness and its availability domestically.

Earnings Impact
No major earnings impact to Wilmar as this is a small acquisitions vs its
current operation in Asia.

Recommendation
We reiterate our BUY call with a lower target price of S$7.40 based on sum-of-the-parts valuation to value its palm-base business at
16x 2011F PE and 20x for its China operations.  We still like Wilmar for
(1) market leader in China consumer cooking oil with pricing power (2)
wide marketing and distribution network enable quick response to take
market opportunity (3) Experience management team.