Jakarta, CNBC Indonesia – The management of PT MNC Vision Networks Tbk (IPTV) explained the issue of the cancellation of the planned merger transaction of its subsidiary PT Asia Vision Network (AVN) with Malacca Straits Acquisition Company Limited (MLAC).
MLAC is a Special Purpose Acquisition Company (SPAC) listed on the US Nasdaq Exchange under the stock code MLAC.
Whereas previously the two companies had agreed to sign an agreement regarding the planned merger.
In IPTV’s official statement, it is stated that with this merger, it is even estimated that the company’s pro forma value will reach US$ 573 million or equivalent to Rp. 8.02 trillion, assuming an average exchange rate of Rp. 14,000 per US$.
However, IPTV Corporate Secretary Muharzi Hasril explained the latest news on this transaction. He said that the merger transaction process for the two had actually been under discussion since the second half of 2020 and at that time the SPAC transaction was still very attractive to investors on the Nasdaq Exchange.
However, entering 2021, there will be a lot of SPAC transactions on the Nasdaq.
Thus, this condition affects the valuation because SPAC becomes overcrowded, including resulting in MLAC’s share price remaining below the par value of US$ 10/share.
“After going through various assessments roadshow, MLAC and AVN finally agreed not to proceed with the transaction [merger],” he said, in an answer letter to the Indonesia Stock Exchange (IDX), quoted 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.
The letter answered the IDX’s question about scurrent status of filing a draft Registration Report to the US Securities and Exchange Commission (US SEC, US OJK).
The IDX also questioned the current status of compliance closing conditions other for the settlement of transactions in connection with the IDX letter No. S06554/BEI.PP2/09-2021 regarding the Request for Exchange Explanation, which was received on September 10, 2021.
On March 23, 2021, the IPTV management of the MNC Group controlled by an Indonesian tycoon, Hary Tanoesoedibjo (Hary Tanoe) gave an official statement that his subsidiary, AVN has merged or 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$1 trillion and an average population of 31 years.
Currently, MNC Media’s main market position reaches 50% of the national audience share on Free-to-Air broadcasts. including 53.5% on Prime-Time belt, over 8 million Pay TV subscribers, over 73 million monthly active News Portal users, and 217 million Social Media subscribers/followers, providing an excellent platform for cross-selling and delivering unique offers and interesting for AVN.
After the merger, AVN collaborated with Malacca Straits with a view to listing AVN on the Nasdaq Exchange.
Listing shares on Nasdaq will give global investors access to the fastest OTT and streaming business in Indonesia, where investors will appreciate AVN’s growth profile.
“This business combination will generate around US$ 135 million of net proceeds to AVN’s balance sheet,” said Executive Chairman of MNC Group Hary Tanoesoedibjo.
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