CVC Said to Seek Up to $1.36 Billion From Matahari Share Sale

PT Matahari Department Store owners including CVC Capital Partners Ltd. are seeking as much as $1.36 billion selling shares in the Indonesian retailer, said people with knowledge of the matter.

CVC and partner Lippo Group, who together control 98 percent of Matahari, set a price range of 10,000 rupiah ($1.03) to 11,250 rupiah per share for the sale, three people said, asking not to be identified because the information is private. The sale of a 40 percent stake values the company at up to $3.4 billion, data compiled by Bloomberg show.

CVC is attempting what may be Indonesia’s biggest share sale in five years as it raises about $3 billion for its fourth Asia fund. Companies from Apple Inc. to Japan’s Fast Retailing Co. are expanding in Indonesia as a swelling middle class underpins spending in the world’s fourth-most populous nation.

CVC is seeking a valuation for Matahari that is up to 30 percent higher than the $2.6 billion Aeon Co., Japan’s largest retailer, was willing to pay for the company. Aeon decided to withdraw a non-binding bid because the valuation CVC was seeking was too high, according to a Feb. 9 letter sent by Aeon to the fund and seen by Bloomberg News.

The sale values Matahari at as much as 28 times estimated profit for this year, a person familiar with the matter said last month. PT Ramayana Lestari Sentosa, the biggest Indonesian department store by floor space, trades at 19.3 times estimated 2013 earnings, data compiled by Bloomberg show.

Middle Class

Matahari, founded in 1958, has 116 stores across Indonesia, according to its website. A venture between CVC and Lippo-backed PT Matahari Putra Prima bought 91 percent of the department store in January 2010 for about $772 million, and acquired the rest of the stake soon after. Matahari Department Store was a unit of Matahari Putra Prima at the time.

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.

The offering may be Indonesia’s largest share sale since a $4.4 billion rights issue by PT Bakrie & Brothers in April 2008, data compiled by Bloomberg show. Companies raised $3.6 billion in Jakarta stock sales last year, the data show.

CIMB Group Holdings Bhd., Morgan Stanley and UBS AG are managing the offering, the people said.

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