CVC Capital Partners today launched an offer for the sale of 40 percent of its holding in Matahari Department Stores, which totals about $1.36 billion, according to a source with knowledge of the matter.
The offer represents 10,000 – 11,250 rupiah per share, implying 25x – 28x of 2013 price to earnings, pricing the deal at roughly $1.36 billion, the source said.
The offering has 15 cornerstone investors including the Government of Singapore Investment Corp and Temasek. They represent 32 percent of the total offer.
CVC bought 98 percent of Matahari for $892 million in 2010 in Indonesia’s first LBO. The transaction was negotiated with the Indonesian family-owned Lippo Group in 2009 and wrapped up the following year.
CVC’s decision to list only part of the business could signal an intention to take advantage of strategic interest in consumer-based businesses. Consumer retail is a hot sector in Indonesia. Around two-thirds of Indonesia’s GDP is driven by domestic consumption fuelled by a fast-growing, young middle class. In 2011, the number of Blackberry users exceeded those in the US.
It was also rumoured that CVC was in talks with Japan's Aeon and Thailand's Central Group over a $3.5 billion sale of 80 percent of the business.