Analyst says Astra should not disclose inside information<\/p>\n
JAKARTA (JP): Securities analyst David Chang said on Thursday
\nthat PT Astra International had a legitimate reason not to
\ndisclose all inside and proprietary information requested by the
\nNewbridge\/Gilbert-led consortium of investors.<\/p>\n
\" I see the coordination between Astra and IBRA as not so
\ngood. Thus, Astra does not trust the preferred bidders,\" Chang of
\nPT Trimegah Securindolestari said, referring to Newbridge Capital
\nand Gilbert Global Equity Partners who are conducting a due
\ndiligence on Astra.<\/p>\n
The Indonesian Bank Restructuring Agency (IBRA) chose on Dec.
\n9, without a competitive bidding process, an investor group led
\nby Newbridge and Gilbert of the U.S. as the preferred bidder to
\npurchase the agency's 40 percent stake in Astra International.<\/p>\n
The due diligence, conducted by Newbridge\/Gilbert on behalf of
\nIBRA, is part of the process to complete the transaction sometime
\nin February as scheduled.<\/p>\n
Chang said Astra could not be expected to provide all
\nconfidential information because it could not be assured a
\npotential investor would make a definite commitment.<\/p>\n
Sources close to the transaction said Newbridge\/Gilbert was
\napproved on Dec. 15 to conduct a due diligence after IBRA
\nresolved the legal technicalities of its ownership of Astra
\nshares.<\/p>\n
The sources said Newbridge\/Gilbert submitted two bundles of
\nlists, containing requests for information and documents, to
\nAstra's management.<\/p>\n
One list was for 80 categories of documents. The other
\nrequested Astra's management to provide 81 categories of
\ninformation on Astra as a holding company, 123 categories of
\ninformation and projections on its automotive division, 260
\ncategories of information on its agribusiness division and more
\nthan 100 categories of information on its financial services
\ndivision.<\/p>\n
\"You tell everything in a due diligence and the information
\nyou give could be the lethal weapon against your business,\" Chang
\nadded.<\/p>\n
\"Astra does have the right not to disclose too much about the
\ncompany when Astra is still not sure whether the investors will
\nkeep it confidential.\"<\/p>\n
The sources said the information, projections and other
\nreports requested by Newbridge\/Gilbert were so detailed as to
\ncover new products to be launched, their costs of production,
\nAstra's pricing strategy, profit margin and other proprietary
\ninformation. They said the information could put Astra out of
\nbusiness if it was leaked to its competitors.<\/p>\n
Chang concurred that questions about products' profit margins
\nwere market-sensitive information which would be detrimental to
\nAstra if obtained by competitors.<\/p>\n
\"It is therefore reasonable to demand that a preferred bidder
\nput up an upfront payment as evidence of its commitment. If such
\nan upfront payment was not required, then everybody could go to
\nAstra and say 'I want to look at your books. I want to know all
\nthe details',\" Chang said.<\/p>\n
He did not consider the appointment of a preferred bidder to
\nbe a problem as long as the process was transparent and fair.<\/p>\n
It also would be normal for IBRA to have a preference for
\nparticular foreign investors, he said, emphasizing again that the
\nprocess should be transparent and the underlying reason sensible.<\/p>\n
\"And preferred bidders certainly always have the advantage and
\nother bidders may only try their luck.\"<\/p>\n
IBRA deserves the right to decide who is the preferred bidder
\nand, because Astra was an important national firm, it was
\nunderstandable for IBRA to decide who was the preferred bidder,
\nhe said.<\/p>\n
\"You just cannot open it up for everybody to bid because the
\nones who bid highest may not be the best for the company.\"<\/p>\n
Chang said there was no need to worry that any party could vie
\nfor the 40 percent stake because the company's shares were not
\ncheap. (udi)<\/p>",
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