This article first appeared in The Edge Financial Daily, on December 7, 2015.

KUALA LUMPUR: Indonesia’s largest conglomerate Salim Group is said to be eyeing as much as a 20% stake in Penang-based poultry player CAB Cakaran Corp Bhd, according to a source familiar with the matter.

It is understood that the two companies have been in talks for some time now, with the deal close to being clinched.

“Talks have been ongoing for months between the two parties — CAB Cakaran and Salim Group — they should be concluded soon enough,” the source said.

Details on how Salim Group may buy into CAB Cakaran (fundamental: 0.55; valuation:1.1) are not known, but the Malaysian company’s largest shareholder is its executive chairman Chuah Ah Bee (pic), 64, who — with his wife Chan Kim Keow, 57, an executive director of CAB Cakaran — controls some 55% of the company.

The only other substantial shareholder of CAB Cakaran is Tan Chin Tee with a 5.4% stake.

CAB Cakaran’s stock hit a multiple-year high of RM1.69, gaining 18 sen or almost 12% last Friday, giving the company a market capitalisation of RM254.6 million. This would indicate that the 20% block has a market value of RM50.92 million.

As at end-September this year CAB Cakaran had a net asset per share of RM1.22.

For its financial year ended Sept 30, 2015 CAB Cakaran registered a net profit of RM16.04 million, on the back of RM891.69 million in revenue. Compared with a year ago, net profits rose 43.7%, buoyed by its newly acquired subsidiaries in Singapore, namely Tong Huat Poultry Pte Ltd and Ban Hong Poultry Pte Ltd.

CAB Cakaran sells both eggs and broiler chickens to Singapore, and also operates Malaysian fast-food chain Kyros Kebab.

The RM50.92 million price tag is not expected to pose much of a problem for Salim Group.

Salim Group is engaged in the agribusiness and consumer product sectors in Indonesia, and forming part of the group is Jakarta-listed Indofood Sukses Makmur Tbk, which is Indonesia’s largest food processing company and the world’s biggest producer of instant noodles.

Also part of the Salim Group family is Indofood CBP Sukses Makmur, a leading producer of packaged food products comprising noodles, dairy, food seasonings, snack food, and nutrition and special foods as well as biscuits.

Aside from food, the group also has interests in telecommunications, retail, property and banking.

The group is led by Anthoni Salim, the youngest son of Salim Group founder, the late Liem Sioe Liong, who is also known as Sudono Salim.

Liem, who passed away in Singapore in 2012, was said to be a migrant from China who built his empire in Indonesia and was once considered the richest man in the country. He was also a close ally and supporter of former Indonesian President Suharto.

Anthoni and family were ranked by Forbes as Indonesia’s third richest in 2015, with a net worth of US$5.4 billion (RM22.6 billion).

In June, Anthoni via his Hong Kong-listed First Pacific Co Ltd made an offer for snack and candy maker Cocoaland Holdings Bhd at RM2.70 a share or RM463.32 million in total.

However, First Pacific aborted the deal about six weeks after the offer was made.

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