Several significant foreign retailers are jostling to acquire leading hypermarket and supermarket chains operated by Indonesia’s Matahari group, to gain a foothold in one of Asia’s most powerful emerging economies.

The Jakarta-listed Matahari Putra Prima hired Merrill Lynch to review “all strategic options to maximise shareholder value”, including a possible acquisition, a person close to the situation told the Financial Times. It is accepting bids for 82 hypermarkets and supermarkets nationwide with annual sales of roughly $1bn. Shares in the company jumped 4.89 per cent on the news to 1,500 rupiah on Tuesday.

Lotte Shopping, South Korea’s second-largest retailer said it was seeking to boost its presence in the south-east Asian country of 237m. “We have been looking for opportunities to expand abroad, especially in the retail sector.”

The South Korean retailer hopes to add Matahari to a number of recent deals in China, Russia and south-east Asia as competition intensified at home. It took over Times, the Chinese supermarket operator, for $630m last year and runs 21 outlets in Indonesia through the 2008 acquisition of PT Indonesia Makro, a Dutch wholesaler.

The fresh interest in Indonesia’s booming retail sector comes on the heels of the sale of Matahari’s department stores, a separate unit, to CVC Capital in January for $806m. That transaction, the largest private equity deal in Indonesia’s history, is a sign of growing confidence in the nation’s potential to become the next growth story.

Indonesia, the world’s third-largest democracy, has come through recent global financial turmoil almost untouched. Its stock and bond markets have attracted record levels of capital this year, driven by positive sentiment about its solid fiscal regime, macroeconomic fundamentals and stable politics.

As companies line up to secure their places in Indonesia’s growth markets, they could end up driving up the price of acquisitions.

“You are going to start seeing some very competitive forces taking place to get the deals,” Edward Gustely, a private equity specialist and senior adviser to the Indonesian Finance Ministry, told the FT.

Over the past 10 days, Merrill received huge interest from “foreign players looking to get into Indonesia’s hypermarket sector”, through Matahari, the person close to the situation said. Bids were being received by Merrill and would be reviewed by shareholders.

The Lippo Group, owned by the billionaire Riyadi family, is the largest shareholder of Matahari, with a combined stake of more than 50 per cent. The company could not immediately be reached for comment.

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