MLPL and Temasek plan to sell MPPA

JAKARTA. PT Multipolar Tbk (MLPL) is considering selling a part of its stakes in PT Matahari Putra Prima Tbk (MPPA). To date, Multipolar controls 50,23% of MPPA’s shares.

Investor Relation of MLPL Agus Arismunandar, Thursday (2/2), claimed that some groups have been interested to buy MPPA’s shares. However, Agus refused to specify the prospective buyers.

The management of MLPL is recently evaluating the offers. In this case, the divestment may either continue or terminate, depends on the benefit potentials.

Agus also had not yet specified whether MLPL will remain the major shareholder or become the minority. “There has been no transaction,” Agus said.

Meanwhile, information has it that Temasek, which controls 26,09% of MPPA’s shares through its subsidiary Anderson Investments Pte Ltd also plans to sell its stake in MPPA. Anderson Investments penetrated to MPPA in February 2013, after bought the exchangeable rights (ER) as much as US$ 300 million that were issued by MLPL’s subsidiary, namely Prime Star Investment Pte Ltd.

According to some foreign media, the company value of MPPA will be US$ 1 billion after Temasek’s divestment. Agus denied the information. “The value will be higher,” he said.

The effects of transaction

Analyst at First Asia Capital David Sutyanto estimates, it is normal for MLPL as an investment company to sell MPPA. “The sales revenue will be included under consolidation revenues,” he said.

This corporate action will boost MLPL’s net profits. Automatically, the MLPL’s shareholders would receive higher dividend yields if MLPL sells MPPA with a higher price compared with the price of MPPA’s share at the time when MLPL penetrated to MPPA.

The selling price would be affected by some factors, such as the performance of MPPA.

Lately, MPPA’s performance has been under pressure. MPPA’s revenues during the third quarter of 2016 dropped by 0,5% (yoy) to Rp 10.39 trillion. During the same period, MPPA’s net profits even dropped by 87% (yoy) to Rp 32.57 billion. "Not only MPPA, but overall retail industry has been under pressure,” David said.

Analyst at Koneksi Kapital Alfred Nainggolan added, the realization of MPPA’s divestment may create a problem related to MPPA’s market price. The divestment is potentially to create the new price. Let alone, if MLPL sells MPPA with the price of above the market price.

On Thursday(2/2), the price of MPPA’s share appreciated by 6.56% to Rp 1,300 per a share.

(Muhammad Farid/Translator)