Nov 11, 2010

The race for Nusantara Infrastructure

Toll road operator Jakarta-Serpong PT Nusantara Infrastructure Tbk (META) has advanced  34% just in the last 7 days.
Investors keep buying the stock after they heard that two potential strategic buyers are in the race to buy Nusantara Infrastructure.
At the closing level on November 2, META-coded stock stood at Rp147 per share. But, the stock surged to Rp197 per share yesterday, nearly surpassing Rp200.
Several sources acknowledged with the information related on Nusantara Infrastructure said two strategic buyers are in the race to acquire the stake from controlling shareholder Infrastructure Growth Fund of 52.25% and Bosowa Trading holds 17.48% stake.
"I heard that Rajawali Group and Astra International Group have eyed Nusantara Infrastructure. For Astra, if it could acquire Nusantara Infrastructure, it would enlarge toll road business," the sources said.
The sources said if one of the potential bidders, whether Rajawali Group or Astra Group, could acquire Nusantara, they would bring positive sentiment to META stocks. "I heard that Rajawali Group has more chances to buy Nusantara Infrastructure."
Astra International President Director Prijono Sugiarto denied the market rumor that Astra is in talk to buy Nusantara Infrastructure. But, Astra International has mandated an financial adviser NM Rothschild.
Synergy with Astra
If Astra Group could win the deal, the acquisiton would create a mutual synergy with Astra subsidiary PT Astratel Nusantara, which currently controls 62.62% stake in operator of 72 km long Tangerang-Merak toll road dubbed PT Marga Mandala Sakti (MMS).
Previously, Astratel owned 34% stake in MMS. In December 2008. Astratel added 28.62% more stake by acquiring from other shareholders.
Nusantara Infrastructure posted Rp132.75 billion revenue and Rp22.25 billion net loss as of September 2010. Operating income reached Rp49.80 billion and book value per share was Rp73.35. The current market price reflects 2.69x of META's book value.
Toll road business contributed Rp146.73 billion revenue to Nusantara Infrastructure of consolidated revenue of Rp190.50 billion. Nusantara Infrastructure controls operator PT Bintaro Serpong Damai for Jakarta-Serpong toll road.

Disclosure: No position at the stock mentioned above.

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