TPG Capital In Race for Indonesian Tire Maker

TPG Capital is among the bidders for a majority stake in Indonesian tire maker PT Multistrada Arah Sarana, Reuters reported. South Korea’s Hankook Tire and Japan’s Yokohama Rubber are also in the running. The deal is worth at least $200 million, Reuters wrote.

(Reuters) – Buyout firm TPG Capital, South Korea’s Hankook Tire and Japan’s Yokohama Rubber are among bidders for a controlling stake worth at least $200 million in Indonesian tyre maker PT Multistrada Arah Sarana , three sources told Reuters.

Multistrada, Indonesia’s No. 2 tyre maker, is controlled by one of the country’s biggest conglomerates, the Salim Group, and veteran investment banker Peter Tanuri. Together they own over 44 percent of the firm through direct and indirect stakes and have effective control of the company through its board.

An acquisition of a controlling stake by bidders would trigger a mandatory offer for the rest of the shares, which are publicly held, two of the sources said. Multistrada had a market value of about $360 million, based on Monday’s close.

The controlling shareholders have hired HSBC as adviser, and bids went in on Friday last week, two sources said.

Hankook Tire confirmed its bid in a regulatory filing on Tuesday. A decision could be made as early as this week, according to two sources with knowledge of the matter.

Sources were not authorised to speak to the media.

Multistrada’s vice president and director J Sukarman told Reuters the firm had not been informed by shareholders of any plans to sell. TPG, Salim Group and Tanuri could not immediately be reached for comment. Yokohama and HSBC declined to comment.

Multistrada shares rose as much as 4 percent on news of the Hankook Tire bid, bucking a 1 percent fall in the benchmark Jakarta share index .

Multistrada, which ships over 70 percent of its output to foreign markets, including the United States and Europe, produced 8.1 million tyres last year.

Its net profit edged up to 176 billion rupiah ($21 million) last year, while revenue jumped 19 percent to 2.01 trillion rupiah, according to company accounts.

TPG has bid jointly with its Indonesia affiliate Northstar Pacific, sources said. TPG in 2010 acquired U.S. company American Tire Distributors for $1.3 billion. ($1 = 8507.000 Indonesian Rupiah) (Writing by Stephen Aldred; Editing by Denny Thomas and Muralikumar Anantharaman)