OUE, together with Auric Capital Holdings, has launched a voluntary tender offer (VTO) to acquire up to 40% of the total issued and fully paid-up shares of Indonesia-listed Matahari Department Store at an offer price of IDR1,530 (14 cents) per share.
The VTO was launched by Auric Digital Retail (ADRPL), a joint venture company between OUE (who holds 40%) and Auric Bespoke I (ABIPL), a wholly-owned subsidiary of Auric Capital.
Evercore Asia (Singapore) has been appointed financial advisor for the transaction by ADRPL.
According to OUE’s filing to SGX dated May 5, Matahari has 2,626 million shares in issue as of the date of the announcement. Based on a 40% stake and offer price of IDR1,530 per share, this would amount to a total consideration of some IDR1.6 trillion ($148 million).
The VTO acquisition will be funded by a $95 million facility agreement granted by CIMB Bank to ADRPL, as well as a shareholders' funding agreement between ABIPL, OUE Retail Holdings and ADRPL, pursuant to which, ABIPL and OUE Retail Holdings severally agree to extend loans of up to $150 million to ADPRL in proportion to their respective shareholdings.
ADRPL has also entered into a sale and purchase agreement with Greater Universal (another wholly-owned indirect subsidiary of Auric Capital) and OUE Investments (a wholly-owned subsidiary of OUE), pursuant to which ADRPL will acquire all Matahari shares held by Greater Universal and OUE Investments, representing 5.32% and 4.8% respectively of Matahari's total issued and paid-up shares.
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The acquisitions from Greater Universal and OUE Investments will be at the same price as the VTO of IDR1,530 per share, amounting to a consideration of IDR213.9 billion and IDR192.7 billion respectively.
The consideration shall be satisfied by setting off against the relevant amounts payable by each of ABIPL and OUE Retail Holdings pursuant to a drawdown by ADRPL under the shareholders’ funding agreement.
Upon completion of the VTO and the proposed acquisition, ADRPL will hold up to approximately 50.12% of Matahari’s total issued shares and will become the controlling shareholder of Matahari.
Auric Capital is part of the Auric Group of companies, including holding company Auric Pacific Group. Dr. Stephen Riady and Dr. Andy Adhiwana hold effective interests of 50.15% and 49.9% respectively in Auric Capital.
According to OUE’s filing to SGX dated May 5, Matahari has a book value of approximately $54 million as of Dec 31, 2020. The group is involved in the retailing of consumer goods, including clothes, accessories, bags, shoes, cosmetics and household products.
OUE states that the proposed VTO will allow it to expand its consumer footprint to Indonesia. It notes that Matahari Department Store’s shares have underperformed those of its peers on a five-year basis, and that ADRPL possesses sufficient experience and expertise to refresh Matahari’s strategy and prospects.
As at 9.40am, shares in OUE are down 3 cents or 2.1% lower at $1.40.
