CVC to sell down another stake in Indonesia's Matahari - report

According to the Wall Steet Journal, CVC plans to cut its stake in Matahari to about 17% from 25%. The GP is looking sell the retailer's shares at IDR13,900-14,325 ($1.19-$1.22) a share - a 4.5% to 7.3% discount on Tuesday's closing price of IDR15,000.

CVC raised IDR2.49 trillion ($215 million) when it offloaded 190 million shares in company - or 6.5% - at INR13,100 apiece last March. Before that it had completed a $1.3 billion share sale, alongside its local partner, the Riady family's Lippo Group,

Matahari was a proprietary transaction, sourced through connections to the Riadys. CVC bought a 72.6% stake in the company from a Lippo-controlled entity in early 2010 at an enterprise valuation of $892 million. CVC and Lippo-owned Multipolar then set up an 80-20 joint venture which owned approximately 98% of Matahari.

CVC and Multipolar's sold around 46% of the retailer for $1.3 billion through a share placement that valued the entire company at close to $3.3 billion, or 27x 2013 forward EBITDA. Investors including BlackRock, Fidelity, Schroders, GIC Private and Och-Ziff Capital Management covered a significant portion of the offering.

Matahari is the largest department store operator in Indonesia - and the country's fourth-largest retail brand by sales - with a total of 125 outlets in 61 cities. It aims to add a further 73 branches by 2016, half of which will be located outside of Java. Net income rose 49% year-on-year to IDR1.15 trillion last year, while revenue rose 20% to IDR6.75 trillion.

Matahari has benefited from the emergence of Indonesia's middle class, which accounted for 55% of the population - or 131 million people - in 2011, up from 38% in 2003. McKinsey & Company expects an additional 90 million people to join the ranks of the "consuming class" by 2030, with spending in urban areas rising 7.7% per annum to $1.1 trillion.

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• Topics
• Exits
• Consumer
• Southeast Asia
• Exit
• Consumer
• CVC Capital Partners
• Indonesia