Ciputra Development (CTRA IJ) and Ciputra Surya (CTRS IJ), update from Sarina
It is reported in newspaper last Friday that CTRA will increase its stake in
CTRS by another 22%. We have spoken with management regarding this transaction
and the key point is that the 22% includes the 7.9% stakes bought earlier from
Castleridge Enterprise.
Purchase price is Rp825/share, more than 20% of the current share price. The
whole 22% will be done by year end.
CLSA sales desk in Jakarta struggles to understand why CTRA uses their cash to
increase stakes in CTRS. The official explanation from CTRA is that market is
not valuing CTRS properly hence the family is reluctant to put in new projects
under CTRS. CTRA management has also said that there is no direct family
ownership in CTRS. Whatever it is, this deal will provide support for CTRS
share price, at least temporarily.
