This article first appeared in The Edge Financial Daily, on October 23, 2015.

KUALA LUMPUR: Brahim’s Holdings Bhd shares rose as much as 44.12% yesterday, as the market reacted favourably to news that it had received a conditional binding offer from Singapore-listed SATS Ltd (valuation: 1.7; fundamental: 2.5) to buy a 49% stake in Brahim’s Airline Catering Holdings Sdn Bhd (BACH) for RM218 million cash.

Brahim’s was the sixth top gainer on Bursa Malaysia yesterday, ending the day at an intraday high of 98 sen, up 30 sen or 44.12% from the previous day’s close. A total of 9.65 million shares were traded, with a market capitalisation of RM231.56 million.

In a  filing with Bursa yesterday, Brahim’s said it had received the offer from SATS’ wholly-owned subsidiary, SATS Investments Pte Ltd, to acquire 490,000 shares in BACH on Wednesday. 

“The board will appoint the relevant advisers in due course and deliberate over the terms of the said offer and decide on the next course of action.

“Further announcements will be made once the board [makes] a decision on the conditional binding offer,” added Brahim’s. 

Under the offer, SATS is proposing to pay Brahim’s in two stages: RM110 million upon completion of the transaction, while the remaining RM108 million is conditional upon certain financial targets being achieved.

According to Brahim’s website, BACH owns 70% of Brahim’s Airline Catering Sdn Bhd, while Malaysia Airlines Bhd (MAB) holds the remaining 30% equity interest. BACH offers catering services to 28 global airlines, including MAB, AirAsia Bhd (valuation: 1.2; fundamental: 0.20) and Cathay Pacific Airways Ltd.