(Corrects name of Indonesian bank in paragraph 12)
* GSIP, Lone Pine also among cornerstones
* Shares marketed in a range of 25 to 29 times P/E
* Share sale a test case for private equity in Indonesia
* 36 priv. equity funds raising $11.6 bln for SE Asia-Preqin
By Stephen Aldred and Elzio Barreto
HONG KONG, March 8 CVC Capital Partners has
secured about $200 million in initial pledges from cornerstone
investors, including Och-Ziff Capital Management Group LLC and
asset manager Schroders, for its up to $1.5 billion share offer
in Indonesian retailer PT Matahari Department Store, sources
with direct knowledge of the matter said.
CVC, a London-based private equity firm, is selling as much
as a 40 percent stake in Matahari in what is expected
to be Indonesia's biggest share sale since a $4.4 billion
offering by PT Bakrie & Brothers in 2008. It is a test
case for private-equity exits in Indonesia, which has seen a
rush of investors seeking to benefit from rapid economic growth
in Southeast Asia's biggest economy.
Goldman Sachs Investment Partners (GSIP) and hedge
fund Lone Pine Capital are among the other cornerstones making
initial commitments, though the final roster and the size of the
commitments might change, said the sources.
This is the first time anyone has reported that CVC has
secured a cornerstone investor for the share offering.
The offering is expected to be launched on Monday, added the
sources, who were not authorized to speak on the record about
the matter because details are not yet public. The shares are
being marketed in a price-to-earnings ratio range of 25 to 29
times, they added.
The ratio exceeds those of most of its rivals because the
company's annualized profit is expected to grow more than 40
percent over the next three years, according to how bankers are
marketing the deal to potential investors.
Among its peers, PT Mitra Adiperkasa is trading at
a P/E ratio of 23.94 and PT Ramayana Lestari Sentosa
is trading at a 19.36, according to Thomson Reuters data.
CVC has set a per-share price range of 10,000 to 11,250
Indonesian rupiah ($1.03 to $1.16) for the offer, the Wall
Street Journal reported on Friday, citing sources familiar with
CVC declined to comment on the cornerstone investments, as
did GSIP, Lone Pine and Schroders. Och-Ziff did
not return calls seeking comment on the Matahari offering.
CVC led a consortium to buy 98 percent of the Indonesian
retail group in early 2010 for $790 million, in the country's
largest-ever private equity deal.
The sale of shares in Matahari, the top department store
operator in Indonesia with some 110 stores, will help CVC make a
profit from one of its early investments in Southeast Asia.
Investors also are closely monitoring TPG Capital's
majority stake, valued around $1.7 billion, in Indonesian lender
Bank Tabungan Pensiunan Nasional Tbk, because the
U.S.-headquartered firm's lock-up expires this month, sources
have previously told Reuters.
A fast-growing economy is drawing private equity investors
to Indonesia. Current growth rates would make the economy the
world's seventh largest by 2030, from 16th now, according to
management consultant McKinsey.
Thirty-six private equity funds are raising $11.6 billion
for Southeast Asia, and the $5 billion raised for investment in
the region in 2012 is the most since 2008, according to data
Prospects of strong consumer spending in Indonesia had
prompted Japanese retailer Aeon Co Ltd and Thailand's
Central Group to consider bidding for Matahari, but differences
over valuations hindered any deal.
CVC, one of the world's biggest buyout funds, is launching a
new $3 billion pan-Asia buyout fund later this year, and a
profitable exit from Matahari could help generate investor
interest in the new fund.
CVC has been able to strike deals in the region frequently
and part of its success has been attributed to the firm's head
of Southeast Asia, Sigit Prasetya.
Prasetya spent three years convincing the Riady family to
sell Matahari before clinching a deal, one person familiar with
the matter said.
Earlier this year, CVC agreed to buy 80 percent of
Philippine Long Distance Telephone Co's business
outsourcing unit SPi Global Holdings.
It also closed a $1.7 billion buyout of the KFC fast-food
franchises in Malaysia, together with the investment arm of
Malaysia's Johor State, Johor Corp, and the Employee Provident
CVC hired CIMB Bank, Morgan Stanley and UBS
to manage the Matahari share sale. ($1 = 9692.5000
(Reporting by Stephen Aldred and Elzio Barreto; Editing by
Denny Thomas and Chris Gallagher)