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Jakarta Post

Investors wary of Indofood CBP’s acquisition of noodle maker Pinehill

  • Yunindita Prasidya

    Jakarta

PREMIUM
Jakarta   /   Sat, June 13 2020   /  01:00 am
Consumer products of PT Indofood CBP Sukses Makmur (ICBP)(tempo.co/Subekti)

Investors have dumped shares of processed food giant PT Indofood CBP Sukses Makmur following the company’s decision to acquire instant noodle manufacturer Pinehill Company. The move is viewed as detrimental to Indofood’s financial condition despite the potential boost to its global market outreach, analysts have said. Indofood CBP’s shares, trading under ICBP on the Indonesia Stock Exchange (IDX), have dropped 7.3 percent since the company announced the acquisition plans on May 22, to Rp 8,900 (64 US cents) apiece on Tuesday. Parent company PT Indofood Sukses Makmur saw its shares, trading under INDF, drop 3.44 percent to Rp 6,300 during the same period. “Judging from the share price movement, the impact of the [acquisition] is not very favorable as statements have surfaced that the acquisition is mostly financed by debt. Hence, investors are worried about t...