Hankook Multistrada bid falls through
The scramble to purchase a controlling stake in Indonesia’s second largest tyre manufacturer Multistrada Arah Sarana PT continues, as Reuters reports that the company’s shareholders have rejected a bid from Hankook for a controlling stake. Yokohama and private equity investment firm TPG Capital are reported to be the other bidders, though a Hankook spokesperson told Reuters that “none of the bids satisfied” Multistrada’s shareholders.
Multistrada is currently controlled by the Salim Group and investment banker Peter Tanuri, who Reuters says own stakes equating to more than 44 per cent of the company. The value of a controlling stake in Multistrada is thought to be above $200 million, though details of the bid from Hankook and other potential buyers have not been released.
Multistrada saw a big increase in tyre sales in the first quarter of 2010, reportedly selling 1.5 million passenger car and 600,000 motorcycle tyres; more than fifth up on the same period in 2009. The company is now estimated to be producing more than 8 million tyres as of 2011.
In April, Multistrada announced its intention to run a rubber plantation and processing plant, reportedly to produce 5,000 tonnes per annum, or 70 per cent of the company’s annual natural rubber requirements. On the back of its raw materials and volume increase plans, Detusche Bank analysts said, “we remain confident of Multistrada’s ability to deliver strong earnings growth (28 per cent CAGR 2010-13) primarily driven by sales volume growth”, though they also sounded a note of caution relating to the funding of Multistrada’s natural rubber production plans.
The Indonesian tyre maker produces the Achilles, Corsa, and Strada brands, supplying passenger cars and motorcycles.