JAKARTA (TheInsiderStories) – Indonesian media provider, PT MNC Vision Networks Tbk (IDX: IPTV) abort its plan to acquire LinkNet, backed by Luxembourg’ private equity firm CVC Capital, local-listed company PT First Media Tbk (IDX: KLBV). Last December, Hary Tanoesudibjo’ company announced to buy the majority stakes in the local broadband and cable TV provider.
Based on an official statement on May 4 to the regulator, First Media’ spokesman, Harianda Noerlan disclosed that at April 30 there was no definitive agreement on a final deal by the partiesboth sides the previous December. First Media, which is backed by the Indonesian conglomerate Lippo Group, holds 27.90 percent in LinkNet while CVC indirectly owns 35.55 percent through PT Asia Link Dewa.
CVC first took a stake in LinkNet in 2011 with worth of US$275 million for shares and bonds issued by its parent company. The provider intends to continue its network expansion and has set aside Rp2 trillion ($133.33 million) in capital expenditure for 2020 to extend its operational footprint in Yogyakarta, Cirebon, Cikampek, Purwakarta, Tegal, Madiun and Kediri.
In 2019, MNC Vision has completed the acquisition of 60 percent of the shares of of other cable TV provider, K-Vision, which is a pay television operator with KU-band satellite technology. K-Vision has a customer focus on the lower middle market segment.
The agreement is considered to add 120,000 new customers per month, excluding the growth of customers from its three subsidiary companies, PT MNC Sky Vision Tbk (IDX: MSKY), MNC Play, and MNC Now.
According to MNC Vision’ president director Ade Tjendra, the company’ priority was to consolidate the industry by reducing the number of players in the market. In the end it is likely to significantly increase the company’s overall market share in the coming years.
In July, the operator has been listed at the Indonesia Stock Exchange and raised Rp845.20 billion after offered 3.52 billion shares equal to 10 percent of the issued and fully paid capital with priceRp240 a share. Along with the initial public offering, MNC Vision also issued warrants, where each share is entitled to one warrant to purchase one share of the company for Rp288.
After the IPO, PT Global Mediacom Tbk (IDX: BMTR), as the holding company, still retains 90 percent of controlling shares in the service provider before the warrants. Assuming all warrants are implemented, its parent still control 80 percent of the company shares.
By IPO, French’ Vivendi SA or Hong Kong’ Argyle Street would probably take some of MNC Vision shares, as management chose to not disclose the investor’ name and called it secrecy. MNC Vision’ parent company is now in negotiations process over the investment.
Vivendi was reported planning on having 50 percent of Tanoesudibjo company’ shares in stages. For the first stage, Vivendi will invest 20 percent and the rest will be executed through IPO. The action is estimated to value around $500 million.
MNC Vision through its subsidiaries has more than 20 years experience in the media industry. Its subsidiaries are PT MNC Sky Vision, PT MNC Cable Mediakom, PT MNC OTT Network, and PT Nusantara Vision.
While, LinkNet reported booked a revenues Rp3.5 trillion in 2019, up 9 percent from a previous year Rp3.2 trillion, as net profit rose to Rp312.3 billion, reversing a net loss of Rp46.9 billion the previous year.
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