UPDATE 1-CVC picks banks to sell stake in Matahari - sources

Tue Oct 23, 2012 7:50am EDT

JAKARTA Oct 23 (Reuters) - Private equity firm CVC Partners has hired CIMB, Morgan Stanley and UBS to sell a stake in Indonesian group PT Matahari Department Store , sources said.

CVC is looking at a deal that would value the whole company at more than $2 billion, having paid less than half that 2-1/2 years ago, one of two sources with direct knowledge of the matter told Reuters on Tuesday.

"CVC is looking to sell a stake in the first half of 2013," another source said. Sources declined to be named as they were not authorized to talk to the media.

CVC was not available to comment.

It has asked banks since late September to explore plans to sell Matahari, sources told Reuters earlier.

A successful sale of fast-growing Matahari, Indonesia's biggest department store chain, would likely allow CVC to earn a strong investment return ahead of an expected fundraising push for its next Asia fund, the sources said.

It would also be a boost for the London-based buyout firm as it faces a heavy loss on its investment in Australian group Nine Entertainment.

CVC bought a 98 percent stake in Matahari in early 2010 for $790 million, tying up with local investment vehicle Matahari Putra Prima Tbk in what is still the nation's biggest private equity buyout.

A CVC selldown of Matahari would also be a test for private equity firms wanting to cash out of Indonesia, which in recent years has seen a rush of private equity inflows.

Matahari, which operates more than 100 stores across Indonesia, has an $823 million market value, but with almost 99 percent of the company's shares held by CVC and its partner MPP, there is very little trading in the stock.

CVC's investment appears to have energised Matahari's performance, with its EBITDA (earnings before interest, tax, depreciation and amortisation) margin improving to nearly 30 percent in 2011 - double the industry average and up from 23.3 percent in 2007, according to Thomson Reuters data.

EBITDA at Matahari grew 39 percent over the last 12 months to 1.4 trillion Indonesian rupiah ($146 million), the data showed.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.