Saban Capital Group takes 5% stake in Media Nusantara
Saban Capital Group, the Los Angeles-based private equity firm controlled by billionaire Haim Saban, has purchased a 5% stake in PT Media Nusantara Citra from PT Global Mediacom for INR692 billion ($78.2 million). Saban Capital, which is investing through its affiliate Indonesia Media Partners, also has a 27-month call option that could see it take another 2.5% interest in the company.
Media Nusantara has agreed to increase its dividend payout to at least 45% of net income generated during the preceding year, from 2012. The transaction is expected to close in mid-November.
The company operates three nationwide free-to-air television networks with more than 40% audience share, as well as several other TV channels, newspapers, magazines and radio networks. It claims to have the largest content library in Indonesia, with more than 100,000 hours of entertainment and news content.
Parent company Global Mediacom also has extensive interests in advertising, subscription-based media services and media infrastructure. It owns PT MNC Sky Vision, Indonesia's largest pay-TV operator, Indovision and Top TV.
"We are strong believers in the growth prospects of the Indonesian economy, its positive consumer demographic trends and the growth of its media and content industries," Saban said in a statement. "As the largest media business in Indonesia, and through the leadership of Hary Tanoesoedibjo, Media Nusantara will be a prime beneficiary of Indonesia's burgeoning consumer economy and we believe there are multiple areas of strategic cooperation between Saban Capital Group and Media Nusantara."
Saban Capital targets investments in the media, entertainment and communications industries. Its current portfolio companies include: Univision, the leading Spanish-language media company in the US; Tiger Gate Entertainment, a joint venture with Lionsgate to operate branded pay television channels across Asia; and Taomee, a children's online entertainment company in China.
Saban Capital is not the first private equity firm to target Indonesia's media sector as a proxy for exposure to the growing consumer market. In March CVC Asia Pacific invested $275 million in LinkNet, the country's second-largest fixed-line broadband and cable TV operator.
Both Saban Capital and CVC's deals came through partnerships with the tycoons who own many of the region's plumb assets. Saban Capital is teaming up with media magnate Tanoesoedibjo while CVC worked with the Riady family, which owns LinkNet's parent PT First Media.
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