Foreign institutions are buying stakes in Vietnamese enterprises amid the market fall, with long-term plans for investing in the emerging market.
In the recent private placement, 10.7 million shares of dairy giant Vinamilk (HOSE: VNM) have been sold to a foreign institution at VND129,359 per share, 30 per cent higher than the market price.
Diageo Pic, well-known for vogue drinking brands like Johnnie Walker recently acquired 6.36 per cent stake in the local wine producer Hanoi Liquor JSC (Halico). Halico share was priced by Diageo at some $10.3, more than doubling the market price of some $4.3.
Previously, Diageo purchased a 18.67 per cent Halico’s stake from VinaCapital with the price of nearly $11 per share, while VinaCapital evaluating the share at just $4.
Kohlberg Kravis Roberts (KKR) also acquired 10 per cent of Masan Consumer, a subsidiary of Masan Group.
Dinh Quang Hoan, corporate finance for Viet Capital Securities, said foreign institutions had had to compete for the stake in the Vietnam’s biggest dairy firm. With Vinamilk’s dominant home market position, VNM was an attractive blue-chip.
Also, Diaego valued Halico at a high price thanks to the local firm’s “outstanding position in domestic liquor market,” said Gilbert Ghostine, head of Diaego’s Asia-Pacific department in its statement. “Its strong distribution network along with recent large investment in producing infrastructure had proved [Halico’s] ambition in topping the market.”
Observers said Halico’s annual growth of 30 per cent during past four years and 2011’s earning-per-share expected at VND10,000 on a par value VND10,000, Diaego’s buying price was rational.
Meanwhile, KKR investing in Masan Consumer was believed a wise plan. Sources familiar with the deal said that price was just a part of a complex contract, in which Masan Consumer had to bear other additional terms. According to that contract, the local firm would have to list its shares by 2017 or KKR could convert its hold into the share of the parent company Masan Group.