Hari to buy 40 percent of Multipolar

JAKARTA (JP): Matahari Putra Prima's president, Hari Darmawan, said yesterday he planned to buy up to 40 percent of Multipolar, which earlier this year bought 45 percent of Matahari's shares from his personal holding company.

Hari said he would initially buy about 20 percent of Multipolar's shares which could later be increased to 40 percent.

"The maximum amount will be around 40 percent," he said.

Hari's statement pushed up Multipolar share price to Rp 3,250 in early trading but eased to close at Rp 3,200 from Rp 2,950 on the previous day.

Matahari, Indonesia's largest retail chain and Multipolar, a subsidiary of the widely diversified Lippo Group, are both listed on the Jakarta Stock Exchange.

Multipolar, which is also involved in information technology in addition to its retail operation, was also given the option of increasing its stake in Matahari to 51 percent. Hari was appointed chief commissioner of Multipolar as part of the deal.

The alliance combines the country's two largest retail chains, which operate outlets in most major Indonesian cities.

Multipolar operates several department stores under licenses from U.S. retail chains like Wal-Mart and JC Penny. Matahari operates in most of the country's major cities with over 85 outlets.

Hari said the stake in Multipolar would be financed with proceeds from the sale of his stake in Matahari to Multipolar shareholders.

He refused to say when the deal would be realized.

"I hope we can make it this year, maybe," he said.

Matahari planned to open seven outlets this year in Bogor, Depok, Cianjur, Sukabumi, Cilegon all in West Java, and Pekalongan in Central Java and Surabaya in East Java at a cost of between Rp 105 billion and Rp 140 billion, he said.

"One outlet would cost between Rp 15 billion and Rp 20 billion," he said.

Matahari would finance the expansion from its Rp 200 billion rights issue three months ago, he said.

He said the remainder of the rights issue funds would be used to expand the company's infrastructure like warehouses and computers.

He said there had been an offer from Singapore to open a Matahari outlet there but Matahari did not want to. "We do not want to enter Singapore yet because this country still offers huge potential for us," he said. (09)