KUALA LUMPUR (Nov 12): Cycle & Carriage Bintang Bhd’s (CCB) shares surged 29.46% this morning after its controlling shareholder Jardine Cycle & Carriage Ltd (Jardine CCL) proposed to the board to undertake a selective capital reduction and repayment (SCR) at RM2.20 per share.
At 9,02am, CCB rose 38 sen to RM1.67, valuing it at RM168.24 million.
The proposed SCR will pave the way for the privatisation of the auto player, the share price of which has been downhill in the past few years to a 10-year low. The stock was last traded at RM1.29.
“Upon the completion of the proposed selective capital repayment, Jardine CCL will own 100% equity interest in CCB and Jardine CCL does not intend to maintain the listing status of CCB on the Main Market of Bursa Malaysia,”it said.
Meanwhile, Affin Hwang Capital Research CCB to “Buy’ at RM1.29 with a higher target price of RM2.20 (from 96 sen) the privatisation offer.
In a note today, the research house said the privatisation exercise is a good opportunity for CCB’s shareholders to exit their investment.
“We deem the offer price of RM2.20/share attractive,considering that CCB is still loss making and likely to continue facing a challenging retailing environment in the next few years.
“We upgrade our target price and rating to reflect the privatisation offer,” it said.