Oct 8, 2010

Indomobil to buy Multistrada at Rp450

PT Indomobil Sukses Internasional Tbk (IMAS), controlled by Salim Group, considers to acquire 20%-25% stake in tire maker PT Multistrada Arah Sarana Tbk (MASA) at the price consideration of Rp400-Rp450 per share from major controlling shareholders.
Referring to the price consideration, Indomobil will spend Rp488 billion-Rp688.5 billion to acquire 1.22 billion shares-1.53 billion shares in Multistrada. Foreign investment banker said both companies will announce the acquisition deal soon.      
"They should announce the deal yesterday. But, there is pending matter regarding on one foreign creditor. Once they settle, the acquisition deal will be announced. It might be early next week," foreign investment banker said.
As of June 2010, PVP XVIII Pte Ltd Singapore controls 27.7% stake in Multistrada, Prudent Capital Ltd Malaysia owns 14.9% stake, The Bank of New York Melon Corporation holds 7.3%, and public shareholders hold 50.1%.
"Last night Pieter Tanuri [Multistrada President Director], top level executives of Syailendra, and executives of Indomobil were seen at Pacific Place to settle the deal," the source said. 
Even Go, Multistrada's Head of Investor Relations, said he didn't know about the information. "I don't have any information about it," he said last night.
Target price of Rp520
Multistrada posted a 37.08% jump in earning from Rp65.21 billion in 1H 2009 to Rp89.39 billion in 1H 2010. Operating profit rose 59.66% from Rp76.93 billion in 1H 2009 to Rp122.83 billion in 1H 2010. Revenue climbed 23.77% from Rp813.59 billion in 1H 2009 to Rp1 trillion in 1H 2010.
PT Mandiri Sekuritas on September 22 2010 released a research report about tire maker PT Multistrada Arah Sarana Tbk (MASA).
The brokerage comes with buy recommendation and DCF-based share price target of Rp520, offering 48.6% upside.
"We estimate that the company's net profit to grow by 25% CAGR over the next 2 years on the back of strong domestic and exports market," the report said.

Disclosure: No position at the stock mentioned above.

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