CVC set for partial exit from Indonesia’s Link Net

First Media, the private equity firm's co-investor in the business, said in a regulatory filing that it, CVC-owned Asia Link Dewa and other shareholders would sell approximately 1.22 billion shares in Link Net at IDR6,200-6,700 apiece. This represents a 40% stake in the company.

First Media, which is controlled by the Riady family's Lippo Group, is offloading 334.7 million shares or an 11% stake. Should the transaction price at the top end of the indicative range, First Media would receive proceeds of IDR2.2 trillion ($192 million), leaving IDR5.9 trillion for CVC and the other investors.

CVC invested $275 million in Link Net through a bond and share issue in 2011, leveraging ties to Lippo Group that had secured a buyout of Matahari Department Store the previous year. The private equity firm took a 33.94% stake, with the option of increasing it to the 49% foreign ownership ceiling.

This option was exercised when Link Net went public in June 2014. The company raised IDR487 billion as First Media sold 304.3 million shares at IDR1,600 apiece, reducing its stake from 66.06% to 56.06%. The holding fell to 41% as a portion of shares were transferred to Asia Link Dewa.

Based on First Media's plans to sell an 11% interest in the coming transaction and the expectation that it will become the largest shareholder in Link Net, CVC will exit at least 20% of its 49% interest.

According to Reuters, nine cornerstone investors have committed $257 million to the deal. They include BlackRock, Och-Ziff Capital Management, Goldman Sachs, Malaysian investment firm CMY Capital, Neuberger Berman and William Blair & Co.

It could be the largest sale in Indonesia since CVC and its co-investors exited 46% of Matahari for $1.3 billion in March 2013.

CVC bought a 72.6% stake in the company from a Lippo-controlled entity 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. Since CVC and Multipolar made the joint partial exit in 2013, the PE firm has completed two further share sales with cumulative proceeds of more than $600 million.

Link Net's network covers more than 500,000 homes across Greater Jakarta, Surabaya and Bali, which have combined population of approximately 37 million. The company owns and operates the largest two-way high-speed broadband service, providing internet access to retail and business customers, including the delivery of data communication and cable TV services.

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• Topics
• Exits
• Southeast Asia
• Media
• Indonesia
• Southeast Asia
• CVC Capital Partners
• Exit
• Sell down
• Media