MATAHARI ANNOUNCES Rp 1.25 TRILLION SHARE BUYBACK PROGRAM; SOLIDIFIES POSITION AS INDONESIA’S LARGEST AND MOST PROFITABLE RETAIL PLATFORM

  • Buyback program signals Board’s strong conviction; may result in purchase of up to 7% of company’s shares;
  • Move solidifies Matahari’s position as Indonesia’s largest retail platform;
  • Company to focus on growing its highly profitable large format stores, and also smart investments into online commerce, merchandise brands, and logistics.

PT Matahari Department Stores Tbk (“Matahari” or “the Company”; stock code: “LPPF”), Indonesia’s leading and most profitable retail platform, announced today that it will buy back up to 1.25 Trillion Rupiah of its common shares, at a maximum price of Rp 13,330 per share. In addition the Company also announced that it will re-brand itself as “Matahari”, to better reflect the Company’s positioning as a multi-faceted retail platform.

The Company will hold an Extraordinary General Meeting of the Shareholders (EGMS) on 8th October 2018, where it expects its shareholders to vote in favor of the Board’s proposal. The buyback program may result in the purchase of up to 7% of the company’s shares, reflecting the Board’s strong conviction in the Company’s performance. The Board views the current market weakness as a unique opportunity to improve returns for its shareholders.

Eddy Handoko, Multipolar’s President Director said “As the largest shareholder in Matahari we fully support the Board’s buy-back proposal, and will not be selling any shares as part of this program”.

Company CEO and Vice President Director Richard Gibson, commented: “As the leading retail platform in Indonesia we believe that we have considerable room to further grow our large-format stores, which will enable us to better serve our target middle income segment in the years to come. We are committed to growing our existing store base, primarily our larger format stores, but also, where the strength of the brands permit, in specialty store formats as a complementary growth strategy.

In addition we will also make further investments in our logistics capabilities, which not only reduce operational costs in our core business, but also support our fast growing E-commerce business and increasingly profitable 3rd party services. In the coming year we are planning to increase our capital investment in PT Matahari Nusantara Logitik (MNL), our 100% subsidiary, by approximately Rp 500 billion, which will fund the purchase of a new multi-purpose distribution facility, with a size in excess of 50,000 m2.

Given the above, in our opinion the Company’s current share price significantly undervalues the Company, and thus presents a compelling opportunity to increase returns for our shareholders.”

The Company also said that it is pleased to report that PT Global Ecommerce Indonesia (GEI), of which Matahari is a minority shareholder, has indicated it expects to complete an additional round of financing by the end of the year. As was previously indicated, Matahari will not be participating, but is very pleased to see its investment in GEI continue to progress well. GEI also indicated that it has made successful investments in a number of companies including: Red Carpet Logistics (RCL), a last mile logistics service provider, and Mbiz, a leading B to B e-Commerce platform with revenues of over Rp 800 billion in 2017, which includes Tokyo Century as a minority shareholder.