By P.R. Venkat and Eric Bellman
Private-equity company CVC Partners has appointed CIMB Group
Holdings Bhd., Morgan Stanley and UBS AG as bankers to advise it on
selling shares in Indonesia's Matahari Department Store (LPPF.JK),
in a deal that could be worth up to $1 billion, people with direct
knowledge of the matter said Monday.
It was unclear how many shares would be offered but just 1.8% of
Matahari Department is in public hands, with the rest held by CVC.
Indonesia doesn't have a minimum level of public float for its
listed companies.
The sale of the shares could happen as early as the first
quarter of the next year, one of the people said, and may raise up
to $1 billion, another person said.
CVC declined to comment.
Indonesia is a favorite with institutional investors seeking
growth prospects, and retailers -- domestic and foreign -- are
expanding in the country to tap spending by a growing middle
class.
Earlier this month, CVC--which acquired its Matahari Department
stake in 2010 for $770 million from Indonesia's Riady
family--invited banks to pitch for mandates on the share sale
process, people with knowledge of the deal said.
Matahari Department is Indonesia's fourth-largest retail brand
by sales, behind Indonesian convenience-store chains Alfamart and
Indomaret, and French hypermarket operator Carrefour SA, according
to Euromonitor. Matahari operates 109 stores across Indonesia.
Matahari's thinly traded shares have so far risen 22% this year,
outpacing the wider market, which has risen 14% this year.
Department stores aren't keeping up with demand, with just 10 or
so new outlets opening in Indonesia a year, according to the
Indonesian Retailers Association. The country had 300 department
stores at midyear, the association said.
Still, Matahari's Department first-half net fell 39% to 157.46
billion rupiah ($16.4 million), from 258.98 billion rupiah a year
earlier, facing stiff competition, particularly from convenience
stores.
The Indonesian government expects the economy to expand as much
as 6.4% this year and up to 7% next year. The country has a middle
class, defined as people who spend between $2 and $20 a day, of 130
million people, according to the World Bank.
The planned sale follows losses by the private-equity firm in
Australia. CVC last month said that the head of its Australian
operations Adrian MacKenzie was leaving the company after 17 years.
Mr. MacKenzie was instrumental in CVC's 5.6 billion Australian
dollar ($5.72 billion) acquisition of media company Nine
Entertainment, which has A$3.8 billion in debt.
CVC planned a $2.5 billion initial public offering of its
motor-racing franchise Formula One Group in Singapore this year but
pulled the deal in May because of volatile markets.
-Jason Ng in Kuala Lumpur contributed to this report.
Write to P.R. Venkat at venkat.pr@dowjones.com;
eric.bellman@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires