Open letter to the board of Indofood Agri Resources

SINGAPORE (May 20): Dear Board of Directors, As a long-term investor in Indofood Agri Resources (IndoAgri), I am disappointed that you are recommending that I accept the offer from Indofood Sukses Makmur (Indofood). The offer price of 28 cents per share significantly undervalues the long-term potential of the assets held by IndoAgri, in my view. Instead of encouraging minority investors to accept such a paltry offer, you ought to be working to address our company’s obviously depressed market valuation in a manner that is fair and reasonable to all its shareholders.

Before I go any further, let me first say that I have no expertise in the agribusiness field and am in no position to second-guess business decisions taken by IndoAgri’s board and management. I bought shares in IndoAgri some years ago because I thought it to be a well-run company operating in a promising sector, and that its shares appeared to be reasonably priced.

Since then, I have watched IndoAgri expand its operations, and branch into the sugar business in Brazil, all while maintaining its financial soundness. Of course, I am disappointed with the recent deterioration in IndoAgri’s profitability, and the steep decline in its share price over the last few years, which have been attributed to weak commodity prices. I had plenty of opportunity to sell, but I chose to hold on.

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