Sampoerna may withdraw Indomarco takeover bid

Sampoerna may withdraw Indomarco takeover bid

JAKARTA (JP): Publicly cigarette listed company PT Hanjaya Mandala Sampoerna will withdraw a plan to buy a majority stake in retail operator PT Indomarco Pristama if the Indonesian Bank Restructuring Agency (IBRA) fails to give a response by Wednesday, the company's executive said on Monday.

Sampoerna's finance director Ekadarmajanto said that the diversified cigarette producer was waiting for a response from IBRA to its proposal to buy up to 51 percent of the retail operator.

"But if there is no reply by Nov. 15, it would be better for us to pull out of our proposal and seek other retail companies to acquire," he told reporters following a hearing with the House of Representatives Commission V on industry and trade affairs.

The Salim Group transferred its 51 percent ownership in Indomarco last year to IBRA as part of the restructuring of the business group's massive debts to the government.

Indomarco plans to sell 46.2 million new shares, or a 35 percent stake of its enlarged shares, through an initial public offering (IPO) later this month. But IBRA has yet to decide whether it will sell its 51 percent stake in the company through the IPO or through a direct placement.

Sampoerna's Eka said the move to buy Indomarco is in line with the company's plan to focus more on expanding its retail business next year.

Sampoerna currently has a controlling stake in listed retailer PT Alfa Retailindo.

Indomarco was founded in 1988 by the Salim Group and Indomarco Perdana, with ownership of 51 percent and 49 percent respectively, and operates 449 outlets in Jakarta, Tangerang, Bandung and Surabaya. Of these, 335 are managed by Indomarco while the other 114 are franchise operations.

Indomart's sales reached Rp 490 billion (US$57.6 million) in the first six months of 2000, the company's executive said recently. (hen/tnt)