CCK, controlled by Sarawak tycoon Tiong Su Kouk, rose as much as 10.7% or 16 sen to RM1.66 in the morning session, valuing the group at RM1.03 billion.
The stock settled at RM1.64 at the midday break with 10.1 million shares traded, almost 10 times the 200-day moving average.
In a bourse filing yesterday, CCK said it had signed a binding term sheet with Astrantia Sdn Bhd, a special purpose vehicle of a fund advised by Creador, for the latter to acquire a 40% stake in PT Adilmart, which produces frozen food.
The deal will be executed through the acquisition of existing Adilmart shares as well as subscriptions for new Adilmart shares, spread across three tranches totalling RM170.3 million.
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, which will become direct entities under the CCK group.
Meanwhile, Public Investment Bank has downgraded CCK to “underperform” with a target price of RM1.20.
It said in a note the current valuation is “trading ahead of fundamentals” following the recent surge in CCK’s share price. Its shares have jumped over 88% year-to-date.
From fishmonger to seafood tycoon
The group’s businesses are carried out primarily in Sarawak, Sabah and Indonesia. Its integrated supply chain consists of feedmill, breeder farms, hatcheries, broiler farms, layer farms, and retail stores. Its poultry abattoir can process over 30,000 birds per day.
CCK was founded by the 82-year-old Tiong, transforming a small family-run business to one of Sarawak’s largest integrated poultry producers and producers of frozen seafood.
He began his entrepreneurial journey as a 14-year-old selling seafood in his home state, according to the company’s website. He is also the executive chairman of shipbuilder Nam Cheong Ltd, which is listed on the Singapore Exchange.
The Tiong family is well represented on the CCK board with Tiong’s son Chiong Hiiung, 57, the group managing director while another son, Chiong Soon, 54, is an executive director. Chiong Hiiung’s son Ethan Tiong, 28, is the deputy CEO.
The group was listed on the then Kuala Lumpur Stock Exchange in 1997.
‘Private equity legend’
Creador’s investment in CCK’s unit appears to be its first venture into the poultry and food processing business. It has so far not issued a statement on its proposed acquisition.
CCK’s price surge today is not surprising. Listed companies typically get a huge boost if they are linked to Brahmal, who has been dubbed a “private equity legend” for his successful investments in growth-orientated businesses primarily in Malaysia, India, Indonesia.
Earlier this month, automotive parts maker MCE Holdings Bhd rose to its highest level in at least two decades after announcing Brahmal as its newest substantial shareholder. Its shares surged as much as 26% or 44 sen to RM2.15 on May 10 following the announcement.
Creador’s most prominent investments in Malaysia include home improvement chain MR DIY Group (M) Bhd and credit bureau CTOS Digital Bhd, which are now listed on Bursa Malaysia. MR DIY’s market capitalisation is a whopping RM17.1 billion while CTOS is valued at RM3.16 billion.
Budget retailer Eco-Shop Marketing Sdn Bhd and Loob Holding Sdn Bhd, which runs bubble tea chain Tealive, are among privately-owned companies backed by Creador slated for initial public offerrings in the near future.
Another Creador-backed company – BIG Pharmacy Holdings Bhd – announced last September it will pay RM675 million for a 75% stake in Caring Pharmacy Group Bhd. The merged pharmaceutical group is expected to be listed within the next three years, according to news reports.
Creador was founded in 2011 by Brahmal, now its CEO. Since then, it has launched five funds, which has attracted investors ranging from fund managers, private pension funds, family offices, government-linked bodies, to private wealth managers and individuals.
It currently has US$3 billion (RM14.01 billion) in assets under management and has invested in 54 companies in South and Southeast Asia.
Brahmal, 55, previously spent 11 years as managing director of ChrysCapital, a leading private equity firm focused on growth capital investments in India. Prior to that, he was at pay-TV operator Astro.
He started his career at British American Tobacco and has also worked at the Boston Consulting Group.