CVC to Raise $1.3 Billion From Matahari Share Sale

SINGAPORE--CVC Capital Partners will raise US$1.3 billion from selling nearly half of its stake in Indonesian retailer Matahari Department Store (LPPF.JK), as the private equity firm cashes in on its investment in one of Southeast Asia's fastest-growing markets.

CVC, which owns about 80% of Matahari, will sell 1.17 billion shares for 10,850 Indonesian rupiah each (US$1.12), the mid-point of its indicated price range of 10,000 rupiah-11,250 rupiah a share, people with knowledge of the deal said Friday.

The share sale, which started earlier this month, has so far been nearly five times subscribed and books in Asia are due to close later in the day, one of the people said, indicating that investor appetite for assets in Southeast Asia remain strong.

Indonesia has become an attractive market for foreign investors due to its rising middle class and booming economic growth. The World Bank estimates 130 million Indonesians qualify as middle class, defined as those who spend between $2 and $20 a day. The country's economy is expected to grow by up to 6.8% this year, which should boost incomes and consumer spending as well.

Matahari is Indonesia's largest department-store chain by value of sales, with a 32% market share. The chain, which sells affordable fashion, has 116 stores across Indonesia, according to its share-offer document. CVC bought an 80% stake in Matahari in April 2010.

Indonesia's Riady family owns most of the rest of Matahari Department Store's shares, with a mere 1.8% in public hands. Indonesia doesn't require a minimum public float for listed companies.

CIMB Bank, Morgan Stanley, UBS and Standard Chartered Bank are among the banks that advised CVC on the sale.

Write to P.R. Venkat at [e-mail]

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