UPDATE 2-Noble Group eyes Singapore listing of agri business
* Noble says listing subject to market conditions * Noble shares up 5.8 pct; broader Singapore market up 0.2
pct
(Adds stock move, adviser) By Saeed Azhar and Eveline Danubrata SINGAPORE, Oct 5 (Reuters) - Singapore-listed commodities
firm Noble Group is seeking to list its agriculture
business, which accounts for a third of its earnings and may
have a value of more than $5 billion. The company, which wants to list the business on the
Singapore Exchange, said late Tuesday the process will be
subject to market conditions. JPMorgan is advising Noble on the planned listing,
two sources with knowledge of the deal said on Wednesday.
JPMorgan and Noble declined to comment on who is advising the
company or the size of the deal. Shares of Hong Kong-based Noble jumped as much as 5.8
percent on Wednesday, their biggest intra-day jump since Aug.
31. The broader Straits Times Index was 0.2
percent higher at 0341 GMT. Noble, which counts sovereign wealth funds China Investment
Corp and Korean Investment Corp among its shareholders, has a
market value of about $6 billion. Its shares have suffered this year from a selloff in
companies that trade industrial commodities. “We believe a spinoff makes sense to further avoid the
structural de-rating that has defined the commodities trading
sector this year,” UBS analyst Andreas Bokkenheuser said in a
note to clients. Nomura said the equity value of the business could be more
than $5 billion and even at current valuations, it should have a
value of $3.3 billion. “We believe it may be good for valuations, as agri-assets
and traders/processors generally command a higher valuation as
compared to non-agri portfolio,” it said in a note. Noble has a price-to-earnings ratio of around 8, below rival
Olam’s 10.8, which benefits from a premium due to its
focus on largely agriculture commodities. Noble’s agriculture business is primarily made up of soybean
crushing in Argentina, Brazil and China, sugarcane mills in
Brazil as well as other businesses such as cotton, coffee, cocoa
and other grains. Noble shares have been hurt this year because the company
trades a lot of cyclical commodities such as iron ore and
aluminium. Its shares had fallen about 44 percent, more than the 21
percent drop in the Singapore market, based on Tuesday’s close.
