Saban Capital Group, led by U.S. billionaire Haim Saban, bought a 5 percent stake in Indonesia’s PT Media Nusantara Citra for 692 billion rupiah ($78.2 million) in its first investment in the Southeast Asian country.
The Los Angeles-based private equity firm will pay 1,000 rupiah a share for 692.3 million shares of Media Nusantara, according to an e-mailed statement. Saban has an option to buy an additional 346.2 million shares, or about 2.5 percent of the company, over the next 27 months, the statement said.
Media Nusantara, 70 percent-owned by Indonesia’s largest media company PT Global Mediacom, expects sales to jump 65 percent this year to 8 trillion rupiah on an increase in advertising, local newspaper Kontan reported in April, citing President Director Hary Tanoesoedibjo. The shares have advanced 14 percent so far in 2011, outpacing gains in Indonesia’s benchmark stock index and valuing the company at $1.7 billion.
“We’re looking to be quite active here in Asia, so we see this transaction as a cornerstone investment for us,” Adam Chesnoff, Saban’s chief operating officer, said in a phone interview today. “We hope over the near term, we will be able to identify and execute other opportunities as well within the media and telecom space.”
The transaction is expected to close by mid-November, according to the release. As part of the deal, Media Nusantara agreed to boost its dividend payout ratio to 45 percent of the previous year’s net income, starting in 2012, the companies said. Chesnoff said the price paid for the option shares will be at a “slight premium to what we’re paying today.”
Media Nusantara shares rose 0.9 percent to 1,090 rupiah at 2:57 p.m. local time today. The company has operations from content production to newspapers and radio, according to its website. It has the largest content library in Indonesia, reaching more than 100,000 hours of entertainment and news content, increasing by more than 15,000 hours annually, the statement said.
Saban Capital Group focuses on the media, entertainment and communications industries, according to its website. Haim Saban, ranked the 287th wealthiest person in the world by Forbes Magazine last year, made his fortune with the children’s television show Mighty Morphin Power Rangers.
The company holds stakes in Univision Communications Inc., the Spanish language-media company, as well as Tiger Gate Entertainment, a pay-television joint venture with Lions Gate Entertainment Corp. In June this year, Saban was a cornerstone investor in Shanghai-based Taomee Holdings Ltd.’s initial public offering on the New York Stock Exchange.
Saban, through its unit Indonesia Media Partners LLC, was advised by UBS AG, according to the statement. Morgan Stanley advised Media Nusantara.