Hot stock: Japfa declines comment on potential privatisation deal; stock jumps 20.9%

THE shares of Japfa jumped as much as 20.9 per cent after the company issued a statement declining to comment on a potential privatisation deal reported in a Bloomberg article.

Last Friday’s (Mar 8) article reported that the owners of the mainboard-listed agri-food company are considering taking it private and have started talks for a loan that would back any such move.

The company said before the market opened on Monday that it “does not consider it appropriate” to comment on the matters that are not actions of the company or the board, and highlighted that exploratory discussions on different transactions are regular.

As at 9.12 am, the counter was trading up S$0.045 to S$0.26 with 3.7 million shares traded, registering a one-year high.

The board said that its key shareholders, Renaldo Santosa and his family, are approached by various finance professionals from time to time to consider a variety of transactions, and as a matter of practice, the family typically assesses all such proposals.

“As a result, the family are regularly engaged in exploratory discussions regarding various corporate actions, including ones both similar and different to what is currently being reported on,” said the second-largest poultry firm in Indonesia.

The board also said that there is no certainty that any definitive agreement will be entered into, or any transaction will materialise.

Japfa was founded by Ferry Teguh Santosa in 1970s. Its 2023 annual report lists four substantial shareholders with the surname Santosa, including Renaldo Santosa whose a total interest of the company stood at 60.70 per cent as of last March. 

The company operates in the production and processing of poultry, swine, aquaculture and beef, as well as packaged food with facilities in Indonesia, Vietnam, India, Myanmar and Bangladesh. It posted a net profit of US$22.8 million for the half year ended December, compared to a net loss of US$35.9 million in the corresponding year-ago period.

Despite half-year improvement, it recorded a full-year loss of US$30.8 million, compared to a net profit of US$8.2 million in FY2022. The loss was attributed to the group’s loss of US$53.6 million in the first half of the year, as well as cost of living pressures, with disposable income squeezed by rising inflation, based on its financials released on Feb 29.

The counter of Japfa was trading up 16.3 per cent, or S$0.035, to S$0.25 as at 2 pm on Monday. With 8.8 million shares changing hands, it stood as the 15th most heavily traded counter by volume on the Singapore Exchange.