CVC-owned Matahari launches up to $1.36 billion Indonesia offering: terms

CVC Capital Partners and PT Multipolar Tbk launched on Monday an up to $1.36 billion offering of shares in retailer PT Matahari Department Store, seeking to benefit from growing investor appetite for consumer stocks in Indonesia and partially cash out of one of their most profitable investments in the region.

CVC, through one of its subsidiaries, and Multipolar are offering 1.167 billion shares in Matahari in a range of 10,000 to 11,250 rupiah, putting the total deal at 13.13 trillion rupiah ($1.36 billion), according to the term sheet.

CVC's exit from Matahari is on target to be among the most profitable for a big firm in Southeast Asia. The London-based private equity firm led a group that acquired Matahari in 2010 for $790 million, including debt, and is now making a partial exit that values the company at $3.4 billion, according to Reuters calculations.

CVC declined to comment. Multipolar and Matahari did not immediately return a request for comment on the offering.

The share sale is expected to be priced on March 21, with the settlement set for March 27, the terms showed.

The offering has secured about $435 million in cornerstone pledges from a who's who of global and regional investors, including BlackRock , Fidelity Investments, Schroders and Goldman Sachs' GS Investment Strategies, confirming a Reuters report on Friday.

The group of 15 investors also includes Government of Singapore Investment Corp and state investor Temasek, and hedge funds Och-Ziff Capital Management Group LLC and Azentus Capital Management Ltd.

Investors are attracted to Indonesia's rapidly growing economy and expanding middle class, with the country expected to add 90 million people to its consuming class by 2030, according to McKinsey & Co.

The secondary share sale, equivalent to a 40 percent stake in Matahari, would cut the stakes owned by Multipolar and CVC in Indonesia's top department store operator. It would also help boost liquidity in the thinly traded stock.

The indicative range is equivalent to a price-to-earnings ratio of 24.9 to 28 times for 2013 and 18.3 to 20.6 times for 2014.

CVC hired CIMB Bank , Morgan Stanley and UBS last year to manage the sale. ($1 = 9684.5000 Indonesian rupiahs)

(Additional reporting by Stephen Aldred in Hong Kong; Editing by Chris Gallagher)