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Matahari Seeks Partner, Decides to Keep Hypermart

PT Matahari Putra Prima, Indonesia’s biggest retailer by market value, said it will seek a “global partner” to help develop its Hypermart business after deciding to retain the unit. The company’s shares dropped.

The retailer may sell its non-food assets as it seeks a partner that can provide technological help and improved buying terms for its hypermarkets, Jakarta-based Matahari said in an e-mailed statement today. It made the decision after receiving recommendations of a review by Bank of America Corp.’s Merrill Lynch unit. A partnership may take the form of a global retailer buying a majority stake, Matahari’s spokesman said.

Matahari’s hypermarkets, with annual sales of about $1 billion, rival Carrefour SA in Southeast Asia’s largest economy and most populous nation, which is forecast to expand 6.3 percent this year. Matahari, which means “sun” in Indonesian, has 52 of the large-format outlets that combine features of a supermarket with a department store.

“Retaining the hypermart business will benefit Matahari in the future as retail business in Indonesia is very promising and getting a license is becoming difficult,” said Viviet S. Putri, an analyst at Anugerah Securindo in Jakarta. “Matahari has a commitment from Merrill Lynch to support the retail business so it may have many options for its expansion plans.”

Matahari slumped 12 percent to 1,470 rupiah at the 4 p.m. close in Jakarta trading, the biggest decline since Dec. 27. The stock climbed 69 percent last year.

“Matahari will invite a strategic partner from global retail players to enter MPPA in the form of investment or majority stake,” Danny Kojongian, a spokesman for Matahari, said today in a mobile-phone text message.

Potential Buyers

South Korea’s Lotte Shopping Co. was one of the four potential buyers for the business, the Indonesian company said last month, without identifying the other three.

Wal-Mart Stores Inc., French retailer Casino Guichard-Perrachon SA, Carlyle Group and Hong Kong’s Dairy Farm International Holdings Ltd. were among the companies that have looked at the assets, people familiar with the deal said in November.

‘No Assurance’

“We would like to bring in a strong global partner and are determined to retain and grow our Hypermart business,” Matahari President Director Benjamin Mailool said in the statement. “But it is important to note at this moment that there is no assurance that any of the plans will materialize.”

Matahari, founded in 1958, also has 25 supermarkets, 53 drug stores, 90 family entertainment centers and 18 book shops as well as a strategic alliance operating 92 department stores in more than 50 cities across Indonesia, it said.

The company said in October it hired Merrill Lynch to analyze its business and follow up on interest by companies outside Indonesia for an investment or partnership. Matahari sold control of its department-store arm to a unit of CVC Capital Partners Ltd. for 7.2 trillion rupiah ($791 million) in January last year.

Lotte Shopping submitted a final offer on Jan. 7 for a hypermart business in Indonesia, the Seoul-based company said in a regulatory filing today, without elaborating. Matahari spokesman Kojongian wasn’t immediately available for comment.

Carrefour, the world’s second-biggest retailer, in June opened its 64th hypermarket in Indonesia where it also has at least 16 supermarkets, according to its website. The French retailer, which entered Asia in 1989 with a hypermarket in Taiwan, opened its first store in Jakarta in 1998.

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