Private equity firms CVC and Argyle Street Management have offloaded shares worth Rp3.02 trillion ($223 million) in Indonesia’s retailer Matahari Department Store. The shares were sold at Rp17,250 each – representing 8.3 per cent discount to the stock’s Wednesday close of Rp18,800.
CVC’s latest share sale is the company’s fourth sell-down in Matahari since the major offloading through a $1.3 billion initial public offering (IPO) in March 2013. The US-based PE firm bought 90.74 per cent stake in Matahari in April 2010 for $880 million.
In January last year, CVC raised $293 million through the sale of an 8 per cent stake in Matahari. The sale was closed at Rp15,400 per share.
A source familiar with the development said, a burst of demand allowed the vendors to enlarge the size of the offering. The base offer of 125 million shares was increased to 175.1 million or equal to 6 per cent of the company’s outstanding stock, and the final book was multiple times oversubscribed and closed with over 80 accounts.
“Books were covered within an hour, but were left open for longer to give US investors a chance to place orders,” said a banker close to the deal, as quoted by Global Capital.
The source added that the book included local and international long-only investors and hedge funds, while allocations was skewed towards existing shareholders as well as long-only funds.
Credit Suisse, the sole bookrunner in the deal, managed to launch the sale when Matahari’s stock hit record high after an impressive quarterly results last month. The biggest shopping mall operator reported a 32 per cent year-on-year-year increase in net income to Rp244 billion in the first three months of the year, propelled by robust sales to its middle-income customer base.
CVC, who is a close partner of Indonesian conglomerate Lippo Group in its other units, is also planning to sell its majority holding in PT Link Net Tbk – a broadband and pay TV operator owned and controlled by the group. Due to a weak economy, however, the exit has been delayed.
Reports said that both CVC and Lippo’s PT First Media Tbk had been exploring the option to sell their combined 67.3 per cent stake for over a year. But a slowdown in Indonesia’s economy had made it difficult to strike a deal.
CVC Asia Pacific is currently investing dedicated Asian funds of approximately $6.8 billion, making it one of the most active private equity investors in the region.