PT Hero denies shares acquisition by Multipolar

JAKARTA (JP): Anton Lukmanto, a director of PT Hero Supermarket, denied yesterday a rumor that the publicly listed retail company would be acquired by the department store operator PT Multipolar Corporation.

Anton said the rumor was baseless because neither Hero or Multipolar had made any plans to form a strategic alliance or buy each other's shares.

He said the operations and financial performance of the retail chain were excellent and that the company did not need fresh funds from new investors.

The founders, which now control around 60 percent of the supermarket chain, had no plan to sell their shares, he said.

"It is possible that they (Multipolar) could buy the shares held by the investing public," he told The Jakarta Post about the possible entry of Multipolar, a subsidiary of the Lippo Group.

Multipolar, which operates several large department stores in franchising agreements with Wal-Mart International and JC Penny, both of the United States, announced late December its plan to acquire 50.1 percent of PT Matahari Putra Prima, the country's largest retail chain.

Hero shares on the Jakarta Stock Exchange (JSX) fell last week to a low of Rp 1,875 from Rp 2,000 on the impact of the take-over rumor. Yesterday the shares gained ground to close at Rp 2,125.

Anton denied that a recent meeting of top executives of Hero and Lippo had discussed a take-over plan.

"Please don't link the meeting with the take-over rumor," he said.

Several newspapers reported last week that Hero's president, Ipung Kurnia, had met Lippo's James Riady.

Hero, founded in 1971, operates more than 60 stores throughout the country. It plans to open 11 more outlets in 1997. It opened 11 outlets last year.

"We don't know what they were talking about," Anton reiterated.

When contacted yesterday, executives from Lippo and Multipolar refused to comment on the matter.

"I don't think Lippo is ready to comment at the moment," said a senior executive at Lippo headquarters. He asked not to be named.

But Anton acknowledged that an acquisition of Matahari by Multipolar would result in fiercer retail competition.

"We are likely to have a lower growth rate of net profit for the 1996 financial year because of fiercer competition. But we will be able to retain our revenue growth rate," he said.

He said that Hero's finances were still being audited.

Hero gained a 50 percent increase in its net profit to Rp 23 billion (US$9.7 million) in 1995. The company booked revenue of Rp 778 billion in 1995, up 22 percent from Rp 638 billion in 1994.

Anton said that Hero expected that its sales had grown 20 percent last year.

Multipolar has agreed to acquire 202.95 million shares of Matahari. Multipolar has also made a tender offer for an additional 5.1 percent of Matahari to increase its total shareholding to 50.1 percent.

Matahari has 84 stores in 30 cities with annual sales of almost Rp 2 trillion ($843.5 million).

Multipolar is the Indonesian franchisee of Wal Mart International, a major department store chain from the United States, Fireworks Family Entertainment centers and JC Penney stores. (icn/09)