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XL acquires internet-TV provider Link Net for $606 million
Publicly listed PT XL Axiata acquired a 66.03 percent stake for Rp 8.72 trillion.
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T
elecommunications giant PT XL Axiata has acquired a 66.03 percent stake in internet and cable TV provider PT Link Net to strengthen its foothold in Indonesia as rivals bulk up.
Publicly listed XL acquired the stake for Rp 8.72 trillion (US$606.14 million) from Asia Link Dewa and First Media. The former is a subsidiary of private equity firm CVC Capital Partners and the latter of the Lippo Group conglomerate.
The public owns the remaining 33.97 percent of Link.
“The share ownership in Link Net is expected to help [XL] seize the available broadband opportunity in Indonesia,” said XL in a document filed with the bourse, the Indonesia Stock Exchange (IDX).
XL is one of the three biggest telcos in Indonesia, the other two being Indosat and state-owned Telkom.
Last year, Indosat inked a $6 billion deal to merge with rival operator PT Hutchison 3, while Telkom’s tower operator subsidiary PT Dayamitra Telekomunikasi (Mitratel) raised $1.3 billion through an initial public offering to expand its tower infrastructure.
Lippo Group executive director John Riady assured the public that Link was financially healthy but needed “a much more significant” expansion strategy to capture the domestic digital market.
“This corporate action is part of [Lippo’s] consolidation and transformation strategy to strengthen its balance sheet and collect fresh funds for future investments,” he said in a statement on Thursday.
Link’s net profit grew 3.38 percent year-on-year to Rp 471.77 billion in the January-September period last year, driven by higher revenue from cable TV and internet services, according to its latest financial report.
Link said in a statement filed with IDX that the acquisition itself would not have any effect on the operational activities, nor on the legal or financial standing of the company.
