The Bayan Price Mystery

IndonesianTalk.com -The Bayan Price Mystery: When Markets Need Answers, Not Speculation. By Laksamana Sukardi There is a mystery in Indonesia’s capital market. PT Bayan Resources Tbk., one of Indonesia’s largest publicly listed companies by market capitalization, has a market value of roughly US$26 billion. Yet Bloomberg has reported that an entity controlled by Indonesian businessman Haji Isam is offering approximately US$3 billion for around 62 percent of Bayan Resources’ shares. The arithmetic is straightforward. If 62 percent of the company is valued at US$3 billion, the implied valuation for the entire company would be approximately US$4.8 billion. On the stock exchange: roughly US$26 billion. In the reported transaction: roughly US$4.8 billion. The difference is close to 80 percent. One company. Two dramatically different indications of value. Why? This is what I call the Bayan Price Mystery. This article does not seek to determine which valuation is correct. Nor do we know what…