Jakarta, CNBC Indonesia – Emiten kThe MNC Group conglomerate controlled by a national entrepreneur, Hary Tanoesoedibjo (Hary Tanoe), namely PT MNC Vision Networks Tbk (IPTV) stated that the cancellation of the merger transaction of its subsidiary PT Asia Vision Network (AVN) with Malacca Straits Acquisition Company Limited (MLAC) on the US stock exchange was confirmed to be final. .
Therefore, the company has not considered the possibility of continuing the merger plan.
MLAC is a Special Purpose Acquisition Company (SPAC) listed on the US Nasdaq Exchange under the stock code MLAC.
Previously, the two companies had agreed to sign an agreement regarding the proposed merger, which was discussed in the second half of 2020 and then canceled on September 18, 2021.
IPTV Corporate Secretary Muharzi Hasril said with the final decision to cancel, regarding the continuation of the establishment of MNC Entertainment Ltd, a subsidiary of AVN in the Cayman Islands for the purpose of merging with Malacca Straits, the company will use the company or dissolve it.
“In relation to MNC Entertainment Ltd, the company will use the company or disband it, according to the plans for the development of the company’s business activities or its subsidiaries,” said Muharzi, in an information disclosure on the Indonesia Stock Exchange (IDX), quoted Monday (11/10/2011). 2021).
Muharzi’s answer was in response to IDX’s questions regarding the cancellation of the merger. “Until now, there is no business development plan for AVN and its subsidiaries,” he said.
Following the cancellation of the merger with Malacca Straits, Muharzi claimed that the decision did not have a significant impact and did not adversely affect the operational and financial activities of the company and AVN. “Operations are still running normally,” he said.
Previously, last September, in IPTV’s official statement, it was stated that with this merger, the company’s pro forma value would reach US$ 573 million or equivalent to Rp. 8.02 trillion, assuming an average exchange rate of Rp. 14,000 per US$.
Muharzi explained that the reason behind the decision was that the merger transaction process for the two had actually been under discussion since the second half of 2020 and at that time the SPAC transaction was still in great demand by investors on the Nasdaq Exchange. However, entering 2021, there will be a lot of SPAC transactions on the Nasdaq.
Thus, this condition affects the valuation because SPAC becomes overcrowded, including the result that MLAC’s share price remains below the par value of US$ 10/share.
“After exploring various roadshows, MLAC and AVN finally agreed not to proceed with the transaction [merger],” he said, Saturday (18/9).
“Another thing behind the above decision is the increasing enthusiasm of investors on the IDX for companies engaged in digital, including the AVN business focus,” said Muharzi.
On March 23, 2021, IPTV management gave an official statement that its subsidiary, AVN, has merged with MLAC.
In IPTV’s official statement, it is stated that with this merger, it is estimated that the company’s pro forma value will reach US$ 573 million or equivalent to Rp. 8.02 trillion.
The merger target is expected to be realized in the second or third quarter of this year.
“The combined company transaction value is US$ 573 million equivalent to 5.8 times EBITDA [laba sebelum bunga, pajak, depresiasi dan amortisasi], more attractive when compared to similar companies in the industry,” wrote IPTV, quoted on Tuesday (23/3/2021)
IPTV said that currently, AVN as the holding company of Vision+ runs its main business in the media over the top (OTT) business with the fastest growth in Indonesia.
With OTT media penetration currently at just 2%, AVN is strategically placed in the early stages of the growth cycle. This is also supported by Indonesia’s fourth largest population in the world with a GDP of more than US$1 trillion and an average population of 31 years.
Currently, MNC Media’s main market position reaches 50% of the national audience share on Free-to-Air broadcasts. including 53.5% on the Prime-Time belt, over 8 million Pay TV subscribers, over 73 million monthly active News Portal users, and 217 million Social Media subscribers/followers, providing an excellent platform for cross-selling and delivering unique offers and interesting for AVN.
After the merger, AVN collaborated with Malacca Straits with a view to listing AVN on the Nasdaq Exchange.
Listing shares on Nasdaq will give global investors access to the fastest OTT and streaming business in Indonesia, where investors will appreciate AVN’s growth profile.
“This business combination will generate around US$ 135 million of net proceeds to AVN’s balance sheet,” said Executive Chairman of MNC Group Hary Tanoesoedibjo.
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