COMPANY VALUATION OF PT PERUSAHAN GAS NEGARA TBK REGARDING TO THE ACQUISITION NEWS

• Main Author: Octaria Basri, Fira
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/64679
• Institution: Institut Teknologi Bandung

More than decades, Indonesia’s economic growth depend on the oil and gas sector. In the past few years, oil and gas sector’s contribution to state revenues decreased significantly along with the decline in reserves and production. The state revenue from the oil and gas industry decreased by almost 80% from Rp216 trillion in 2014 (14% of state revenues) to Rp44 trillion in 2016 (2.8% of state revenues). Perusahaan Gas Negara or also called as PGN is the largest national company in the natural gas transportation and distribution sector. In order to make the business growing wider, PGN are going to acquiring Pertamina Gas or Pertagas. The acquisition is part of the establishment of holding company in energy sector by the Ministry of State Own Enterprises, which was established on April 11, 2018. In order to make the deal realized, the takeover payment method will be carried out in two phases. Firstly, 50 percent of the total purchase price or equivalent to IDR10,09 trillion that will use the cash payment method. Secondly, the company will issue a Promissory Note for the rest of the shares. The share price of PT Perusahaan Gas Negara Tbk (PGAS) or referred to as PGN is moving in the red zone of stock trading on Wednesday (04/07/2018). The share price of PGAS in the red zone occurred after the company announced that it would acquire 51 percent of Pertagas's shares that valued at IDR16.6 trillion. The weakening stock price of PT Perusahaan Gas Negara Tbk happened after PT Perusahaan Gas Negara Tbk and Pertamina made a material transaction by buying 51 percent of Pertagas shares which are Pertamina's subsidiaries. This research is made to know how much the intrinsic value per share of Perusahaan Gas Negara. The data are obtained from PGNs financial report from 2013 to 2018. The valuation of the firm will be calculated by using discounted cash flow method. Since the firm are issuing debt, the free cash flow to the firm will be used. The intrinsic value per share of Perusahaan Gas Negara is IDR6,757.72. With the close price per 31 December 2018 in IDR 2,120.00 that shows an upside of 218.76 percent.