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MP Evans pays up to raise Sennah stake

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MP Evans has upped its investment in its Sennah plantation in Indonesia by buying out a wrangling business partner at more than three times the price of the deal which combined them seven years ago.

The palm oil and rubber group spent $3.2m, or $8,870 a hectare, buying Dr H Rahmat Shah's remaining 20% stake in PT Sembada Sennah Mahju, which owns the 1,800-hectare Sennah estate.

MP Evans bought its initial 80% stake from Mr Shah in 2002 for $3.61m, or roughly $2,500 a hectare, since when the group has undertaken a large palm oil replanting programme and removed its rubber trees. Palm oil sold for less than 1,200 Malaysian ringgit a tonne when the deal was struck compared with nearly 1,800 ringgit a tonne today.

Today's deal followed the withdrawal by Mr Shah of legal efforts, begun in 2003, to cancel the 2002 acquisition. While Mr Shah was initially successful in court, winning in 2004 an order that the deal be unwound, MP Evans won a reversal of that ruling on appeal.

Legal bill

Since, in 2007, losing an appeal to the Supreme Court in Jakarta, Mr Shah had been seeking a judicial review.

MP Evans, which said it was "pleased" that the lawsuit was over, has blamed the costs of the dispute for considerable legal costs over the last five years. In 2005, the group blamed the legal action for a 42% rise to £2.08m (then approx $3.5m) in its "other administrative expenses" line.

MP Evans shares 9p, or 4.4%, higher at 215p in morning trade in London.

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