Sampoerna cancels Astra take over plan
Sampoerna cancels Astra take over plan
JAKARTA (JP): PT Handjaja Mandala (HM) Sampoerna, one of the
country's largest cigarette manufacturers, has canceled its
US$500 million plan to buy a 25 percent stake in PT Astra
International because its minority shareholders disapproved,
according to a report from Sampoerna.
The company notified the Capital Market Supervisory Agency
(Bapepam) on Oct. 29 that it had planned a tender offer to buy a
large stake in Astra.
A capital market regulation stipulates that investors must
follow tender-offer procedures if they want to buy 25 percent or
more of a listed company's shares, or a 20 percent stake in a
listed company with the intention of controlling it.
Tender-offer procedures require investors to publish their
intentions in newspapers and buy shares within 90 days of their
announcement.
Based on the report, Sampoerna had considered buying 25
percent of Astra's shares, assuming it would spend $500 million
buying approximately 290 million shares for around Rp 4,000 each.
If the plan had succeeded, Sampoerna would have become the
largest shareholder in Astra.
Sampoerna said it had expected its shareholders to approve the
tender-offer plan and several related proposals at an
extraordinary meeting of shareholders scheduled for Nov. 2.
The meeting was canceled when the company gave up the tender-
offer.
The report said that Sampoerna's management and founding
shareholders had proposed a rights issue worth $300 million to
finance the take over plan. It said it intended to get the other
$200 million from bank loans.
"We had a $400 million loan facility to meet the proposed
tender-offer requirements," Sampoerna director Ekadharmajanto
Kasih was quoted in the report as saying.
"But in a series of intensive talks with minority
shareholders, fund managers, stock analysts and international
rating agency's analysts, we found we did not have enough support
for our plan even though the company's founders had given their
approval."
"We had hoped to gain approval from more than 50 percent of
shareholders because the founders own more than 50 percent of the
shares in Sampoerna. But the founders preferred not to use their
voting power," Ekadharmajanto said.
Since early October, there have been rumors on Sampoerna's
take over bid, even though the company announced late September
it had only bought a 2.85 percent stake in Astra through its
fully-owned subsidiary Sampoerna Investment Corporation.
The company's move on Astra was received badly by many
investors who doubted the company's ability to diversify into a
completely new business sector.
Sampoerna's price dropped to a low of Rp 18,725 (US$7.98)
early this month but the price has slowly recovered, closing at
Rp 21,000 yesterday.
Ekadharmajanto said the extraordinary meeting's cancellation
has helped raise Sampoerna share prices on the Jakarta Stock
Exchange.
"Based on our observations on share performances, we have
concluded that our decision is welcomed by investors," he said.
Ekadharmajanto confirmed that Sampoerna Investment
Corporation's 2.85 percent stake in Astra was sold on Oct. 22
through the Surabaya Stock Exchange. (alo)
JAKARTA (JP): PT Handjaja Mandala (HM) Sampoerna, one of the
country's largest cigarette manufacturers, has canceled its
US$500 million plan to buy a 25 percent stake in PT Astra
International because its minority shareholders disapproved,
according to a report from Sampoerna.
The company notified the Capital Market Supervisory Agency
(Bapepam) on Oct. 29 that it had planned a tender offer to buy a
large stake in Astra.
A capital market regulation stipulates that investors must
follow tender-offer procedures if they want to buy 25 percent or
more of a listed company's shares, or a 20 percent stake in a
listed company with the intention of controlling it.
Tender-offer procedures require investors to publish their
intentions in newspapers and buy shares within 90 days of their
announcement.
Based on the report, Sampoerna had considered buying 25
percent of Astra's shares, assuming it would spend $500 million
buying approximately 290 million shares for around Rp 4,000 each.
If the plan had succeeded, Sampoerna would have become the
largest shareholder in Astra.
Sampoerna said it had expected its shareholders to approve the
tender-offer plan and several related proposals at an
extraordinary meeting of shareholders scheduled for Nov. 2.
The meeting was canceled when the company gave up the tender-
offer.
The report said that Sampoerna's management and founding
shareholders had proposed a rights issue worth $300 million to
finance the take over plan. It said it intended to get the other
$200 million from bank loans.
"We had a $400 million loan facility to meet the proposed
tender-offer requirements," Sampoerna director Ekadharmajanto
Kasih was quoted in the report as saying.
"But in a series of intensive talks with minority
shareholders, fund managers, stock analysts and international
rating agency's analysts, we found we did not have enough support
for our plan even though the company's founders had given their
approval."
"We had hoped to gain approval from more than 50 percent of
shareholders because the founders own more than 50 percent of the
shares in Sampoerna. But the founders preferred not to use their
voting power," Ekadharmajanto said.
Since early October, there have been rumors on Sampoerna's
take over bid, even though the company announced late September
it had only bought a 2.85 percent stake in Astra through its
fully-owned subsidiary Sampoerna Investment Corporation.
The company's move on Astra was received badly by many
investors who doubted the company's ability to diversify into a
completely new business sector.
Sampoerna's price dropped to a low of Rp 18,725 (US$7.98)
early this month but the price has slowly recovered, closing at
Rp 21,000 yesterday.
Ekadharmajanto said the extraordinary meeting's cancellation
has helped raise Sampoerna share prices on the Jakarta Stock
Exchange.
"Based on our observations on share performances, we have
concluded that our decision is welcomed by investors," he said.
Ekadharmajanto confirmed that Sampoerna Investment
Corporation's 2.85 percent stake in Astra was sold on Oct. 22
through the Surabaya Stock Exchange. (alo)