PT MNC Vision Networks Tbk (IDX: IPTV) abort its plan to acquire LinkNet, backed by United States' private equity firm CVC Capital, local-listed company PT First Media Tbk (IDX: KLBV) - Photo by the Company

JAKARTA (TheInsiderStories) – Indonesian pay TV operator, PT MNC Vision Networks Tbk (IDX: IPTV) signed an agreement to acquire Lippo Group’ unit, PT First Media Tbk (IDX: KLBV) and PT Asia Link Dewa in PT Link Net Tbk (IDX: LINK), said the company today (12/02). It said, this action aims to add the company’ subscriptions.

First Media’ spokesman, Harlanda Noerlan said, that the term sheet agreement is the initial step of the whole acquisition plan. The acquisition process, he said, defends on due diligence result, the agreement between IPTV and other parties, as well as the market and regulation.

“The related parties will reach the further agreement in maximum six months,” he said.

Furthermore, the acquisition will not give meaningful impact to the operator. However, both parties hope the acquisition will bring synergy in content, network infrastructure, band-with capacity and others which generate revenue.

Last August, MNC Vision has completed the acquisition of 60 percent of the shares of 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 (US$59.94million) 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 Hary 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.

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