INM buys 20% stake in Indonesian media giant

Fri May 30 2008, 10:42 AM

Independent News & Media (INM) is buying a 20% stake in Indonesian media firm Abdi Bangsa for USD7.5m. Publically-held Abdi Bangsa publishes Indonesia's second largest newspaper for circulation, Republika, as well as magazines, books and websites and operates in the outdoor advertising and radio sectors.  The acquisition values Abdi Bangsa at USD37.5m, or twice the firm's current market cap. However, INM COO Gavin O'Reilly told the Financial Times he believes the price is fair for a company which increased its net profit by 330% last year compared to 2006. Following the acquisition, O'Reilly will run for a seat in Abdi Bangsa's board, but says he will not interfere with Republika's editorial line.

Deal Details

Following the acquisition, Abdi Bangsa's largest shareholder, Erick Thohir, will retain a 52% ownership in the group. The firm says it will use the alliance with INM to expand its regional newspaper business.