KUALA LUMPUR (May 28): Shares in CCK Consolidated Holdings Bhd (KL:CCK) climbed to a new all-time high on Tuesday, after private equity firm Creador Sdn Bhd proposed to invest RM170.3 million in the poultry company's Indonesian unit.

CCK rose as much as 10% or 15 sen to RM1.65. The stock closed 12 sen higher at RM1.62, valuing the company at over RM1.02 billion.

On Monday, CCK said it had signed a binding term sheet with Astrantia Sdn Bhd, a special purpose vehicle of a fund advised by Creador, for Astrantia to acquire a 40% stake in CCK's PT Adilmart (Adilmart), which produces frozen food.

The proposed acquisition will be executed through the acquisition of existing Adilmart shares from CCK, as well as subscriptions for new Adilmart shares, spread across three tranches.

The first tranche involves acquiring a 27.2% equity interest for RM95.3 million. Meanwhile, the second tranche (initial share subscription) amounts to RM60 million, which is for funding business growth. The final tranche, with an investment of RM15 million, is intended for further business expansion.

Public Investment Bank (Public IB), which acknowledges that the proposed investment could facilitate the expansion of CCK’s Indonesia operations, however downgraded its rating on CCK to “underperform” with a target price of RM1.20, citing that the "current valuation is trading ahead of fundamentals following the recent surge in share price".

CCK has seen its share price appreciate over 88% so far this year, in line with the positive sentiment around the counter amid having stronger consumer demand for its products.

Apex Securities, the other research house tracking CCK, has rated the stock a "hold" with a target price of RM1.11.

Prior to the completion of the proposed investments, CCK will ensure that Adilmart undergoes a restructuring exercise to carve out its out-of-scope companies, including PT Central Coldstorage Khatulistiwa and PT Bonanza Pratama Abadi.

PT Central and PT Bonanza will become direct entities under the CCK group upon the completion of the proposed restructuring.

CCK had acquired PT Bonanza — which is primarily engaged in processing and freezing shrimp for local and export sales — from Mitsumoto Corp Ltd, Seven Star Enterprise Sdn Bhd, Harvest Bonanza Sdn Bhd, and Miradewi Rosadi on April 14, 2022.

Should the acquisition proceed, Public IB does not discount the possibility of a special dividend being declared by CCK, which is supported by the group's cash position of RM75 million as of financial year 2023 (FY2023), with minimal capital expenditure required for cumulative expansion totalling RM5 million.