Providence, Indosat vie for up to $1 billion Link Net stake: Reuters

Providence Equity Partners and PT Indosat Tbk are the only bidders for a majority stake in Indonesian TV and broadband operator PT Link Net Tbk after the up to $1 billion price tag put off other potential buyers, people familiar with the process said.

Indonesian firms MNC Group and PT XL Axiata Tbk had also put in initial bids, but they have since dropped out, said the people who declined to be identified as the discussions are confidential.

CVC Capital Partners and Indonesian conglomerate Lippo Group’s media arm PT First Media Tbk were seeking to raise between $875 million and $1 billion by selling their combined 67.3 percent stake in Link Net, the people added.

Such a price would value Link Net at between $1.3 billion and $1.5 billion, above its current market value of $1.1 billion.

In addition to concerns about the valuation, some bidders were worried about the foreign ownership restrictions in Indonesia’s telecommunication sector, one of the people said.

CVC, Providence, First Media, XL Axiata and MNC all declined to comment, while Alexander Rusli, chief executive of Indosat, told Reuters the company was still doing due diligence on Link Net.

“We don’t know whether the valuation is high or low until we have a better picture of the assets,” he said. Indosat is 65 percent-owned by Qatar’s Ooredoo QSC.

For Providence, which specializes in technology, media and telecommunication deals, Link Net provides a rare opportunity to tap the rapid increase in the number of people going online in Indonesia.

The number of internet users in the Southeast Asian nation is forecast to rise by almost 39 percent to 61.9 million in the next four years, according to research firm Euromonitor International. But even with that increase, just over a quarter of the entire population will be online.

CVC bought an undisclosed stake in Link Net four years ago for $275 million.