Hankook, Yokohama and TPG linked to Multistrada purchase rumours
Hankook, Yokohama and buyout firm TPG Capital have all been linked to a possible share purchase of Indonesian tyre manufacturer PT Multistrada Arah Sarana. The firms are said to be bidding for a controlling stake worth “at least $200 million” in the Indonesian tyre maker, the Reuters news agency reports, citing three sources.
Multistrada is Indonesia's second largest tyre maker and is controlled by one of the country's biggest conglomerates, the Salim Group, along with investment banker Peter Tanuri. Together they are said to own over 44 per cent of the firm through direct and indirect stakes.
The key to the talk of a sale is the suggestion that the acquisition of a controlling stake by bidders would trigger a mandatory offer for the rest of the shares, which are publicly held. Multistrada share capital is valued at around $360 million. According to Reuters, the controlling shareholders have hired HSBC as advisers, with the bids being entered on Friday 5 August.
All clear so far. Or is it? While Reuters reported that Hankook Tire confirmed its bid in a regulatory filing on Tuesday 9 August and said that a decision could be made “as early as this week”, a Bloomberg report filed just a couple of house ealier suggested that a Hankook Tire Co. official said “there is no truth to a MoneyToday report that it is seeking to buy the Indonesian tyre maker.”
In response to the Bloomberg report Multistrada stock reportedly fell 3.9 per cent to 500 rupiah. However the shares rose by as much as 4 per cent on news of the supposed Hankook Tire bid, bucking a 1 per cent fall in the benchmark Jakarta share index.
For its part Indonesian business blog Insider Stories reported that Texas Pacific Group (TPG) has bid jointly with its Indonesian affiliate Northstar Pacific. TPG acquired US tyre wholesaler American Tire Distributors for $1.3 billion in 2010.
However Insider Stories also quoted Even Goh, head of investor relations at Multistrada as saying “there is no such bidding process to sell Multistrada.”
Multistrada, which ships over 70 per cent of its output to foreign markets, including the US and Europe is said to have produced 8.1 million tyres last year. Net profits edged up to 176 billion rupiah (US$21 million) last year, while revenue jumped 19 per cent to 2.01 trillion rupiah, according to company accounts. Multistrada shares have skyrocketed 114.28 per cent in the last 6 months to 570 rupiah per share, breaking its record high.
Earlier this year Multistrada announced plans, at an extraordinary general meeting on 21 March, to change its articles of association allowing it to enter into the rubber plantation business.