OUE to buy 88.43% stake in Indonesian coffee chain for 229b rupiah

MAINBOARD-LISTED OUE inked a deal on Monday to take a majority stake in Indonesian company Maxx Coffee Prima, which runs the Maxx coffee chain in Indonesia and Singapore.

OUE's wholly-owned Oddish Ventures unit will pay 229 billion rupiah (S$23.2 million) in cash to buy a 88.43 per cent stake from two firms, Inti Anugerah Pratama and Ciptadana Capital.

The net asset value of the shares was negative 151 billion rupiah as at Dec 31, 2019, the board disclosed, adding that the value of the deal was reached on the basis of factors such as "high barrier of entry into the Indonesia food and beverage market", as well as the extra revenue stream from franchising, and access to "prime retail locations in Indonesia".

"The acquisition will augment and synergise with the group's continuing strategy to scale up and optimise its existing food and beverage portfolio," OUE said in its statement.

The group added that it does not expect the deal to materially affect its net tangible assets or earnings per share for the year to Dec 31, 2020.

OUE also disclosed that two of its controlling shareholders - executive chairman and CEO Stephen Riady, and his brother James Tjahaja Riady - have deemed interests in the vendors.

As such, Dr Stephen Riady and his son Brian, the deputy CEO of OUE, are recusing themselves from the decision-making over the Maxx Coffee transaction, the board added.

OUE shares closed flat at S$1.43 on Monday before the announcement.