March 22 (Bloomberg) -- PT Matahari Department Store’s owners including CVC Capital Partners Ltd. raised 12.7 trillion rupiah ($1.3 billion) selling stock in the Indonesian retailer, according to three people with knowledge of the matter.
CVC and Lippo Group sold 1.167 billion shares at 10,850 rupiah each, the people said, asking not to be identified as the information is private. The shares were initially offered at 10,000 rupiah to 11,250 rupiah.
The sellers, seeking to capitalize on investor optimism about consumer spending in Indonesia, asked for as much as double the median valuation among department stores in emerging Asia, price-to-earnings data compiled by Bloomberg show. Jakarta’s stock benchmark is up 11.3 percent this year and hit a record high earlier this month.
“We have an overweight on Indonesia, particularly in sectors that play on domestic consumption,” said Daphne Roth, Singapore-based head of Asia equity research at ABN Amro Private Bank. “This is exactly the space Matahari is in. There are opportunities in the retail space as people get richer and spend more.”
Matahari, founded in 1958, has 116 stores across Indonesia, according to its website. The company posted a 66 percent rise in net income to 771 billion rupiah ($80 million) in 2012, according to a Feb. 11 filing.
CVC and Lippo planned to retain about 58 percent of the company after the sale, a person with knowledge of the matter said on March 8. A spokeswoman for CVC declined to comment on the final price.
The shares were offered for as much as 28 times Matahari’s forecast 2013 earnings, a person with knowledge of the matter said earlier this month.
Forty-three department store operators in the emerging Asia region trade at a median of about 14 times estimated earnings, data compiled by Bloomberg show.
PT Ramayana Lestari Sentosa, the biggest Indonesian department store by floor space, and Parkson Retail Asia Ltd., with stores in Malaysia, Vietnam, and Indonesia, both trade at about 19 times estimated 2013 earnings, the data show. Robinson Department Store PCL, Thailand’s largest department store chain, fetches more than 31 times estimated 2013 earnings.
About one-third of the shares were acquired by investors including Singapore’s state investment fund, Temasek Holdings Pte, Blackrock Inc. and Goldman Sachs Group Inc., people with knowledge of the matter said on March 11. Cornerstone investors agree not to sell their shares for a certain period of time in exchange for a guaranteed allocation in an offering.
At its closing level of 4802.67 yesterday the Jakarta Composite index is about 1.4 percent below a March 8 record. The index has gained 19 percent in the past year.
Indonesia’s middle class, or those spending more than 2 million rupiah a month, is set to double to 141 million people, equaling about half the total population, by 2020 from 74 million people last year, according to a Boston Consulting Group report. Just a third of the middle class frequent larger retail stores, the report showed.
CIMB Group Holdings Bhd., Morgan Stanley and UBS AG managed the offering, the people said.
To contact the editor responsible for this story: Philip Lagerkranser at firstname.lastname@example.org