UPDATE 1-Boustead Plantations' deal with Kuala Lumpur Kepong awaits final decision

(Adds background in paragraphs 3-6)

Oct 3 (Reuters) - Malaysian palm oil producer Boustead Plantations said on Tuesday that a proposed collaboration with bigger rival Kuala Lumpur Kepong was pending a final decision between the two companies.

A media report earlier in the day said that a 1.15 billion ringgit ($243.54 million) deal for a 33% stake in Boustead by Kuala Lumpur Kepong had fallen through.

The cut-off date for finalising the deal is Oct. 6, according to Boustead.

Boustead's shares hit their lowest in nearly two months in the previous session, losing 13%, with the company halting trading in its shares on Tuesday.

The deadline for deal finalisation has already been extended twice, according to the report.

Kuala Lumpur Kepong said in August it plans to buy a 33% stake in Boustead to take over the smaller rival along with other top shareholders, in due course, in a deal worth 3.47 billion ringgit.

($1 = 4.7220 ringgit) (Reporting by Manvi Pant and Poonam Behura in Bengaluru; Editing by Shounak Dasgupta)