Brahim’s jumps 10.2% on SATS offer to buy catering business

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KUALA LUMPUR (Oct 23): Shares of Brahim’s Holdings Bhd jumped 10.2% in early trade today after the company received a conditional binding offer from SATS Investments Pte Ltd to acquire a 49% stake in Brahim’s Airline Catering Holdings (BACH) for a cash consideration of RM218 million.

At 9.07am, Brahim’s rose 10 sen to RM1.08 with 4.28 million shares traded.

Meanwhile, Hong Leong IB Research has maintained its “Buy” rating on Brahim’s Holdings Bhd with a higher target price of RM1.28 (from 77 sen).

In a note today, the research house said it was positive on this news as the link up with SATS provides Brahim’s with various opportunities to improve profitability moving forward as well as setting a new benchmark valuation for the catering business and aiding in reducing gearing.

“We opine that this corporate development has also set the precedence in terms of valuing Brahim’s halal expertise and know-how in the catering business.

“We maintain our Buy call with an upgraded target price of RM1.28 (based on the catering business alone) from 77sen.

“This corporate development has set a new benchmark in terms of valuations. Our new target price implies a P/B ratio of 1.25x with the other businesses free,” it said.