Foreign investor spends $400 million acquiring Vinamilk shares

A foreign investor spent VND9 trillion ($396.2 million) buying the entire offer of 48.3 million shares in Vietnam Dairy Product JSC (Vinamilk) from State Capital Investment Corporation (SCIC).

SCIC's second round of divestment in Vinamilk was a complete success

The transaction occurred on November 10 at the Ho Chi Minh City Stock Exchange.

The auction attracted 19 investors, including six foreign investors, five domestic investors, and eight domestic individuals registering to buy a total of 73.8 million shares, doubling the total offered shares.

The foreign winner paid VND186,000 ($8.19) per share, VND36,000 ($1.58) higher than the initial price of VND150,000 ($6.6). However, the name of this investor has yet to be disclosed.

As of the end of the transaction session on November 10, Vinamilk’s share value stood at VND173,000 ($7.62). Thus, the buying price at the auction was 7 per cent higher than Vinamilk’s market price on the stock exchange and 24 per cent higher than the initial price.

SCIC’s second divestment round was significantly more successful than the first, when a large portion of the shares put on offer proved unmarketable.

Previously, in mid December 2016, SCIC planned to auction 130.6 million Vinamilk shares, equalling a 9 per cent stake. At the time, SCIC’s representative at the roadshow “Investing Opportunity—SCIC Shares in Vinamilk” claimed that numerous domestic and foreign investors were lining up for the shares.

However, with the exception of F&N Beverages Manufacturing Sdn., Bhd. and F&N Dairy Investments Pte., Ltd., the two 100-per-cent-owned subsidiaries of Fraser & Neave Ltd. (F&N), no new investors registered to join the bidding.

Accordingly, F&N Beverages Manufacturing Sdn., Bhd. and F&N Dairy Investments Pte., Ltd, spent VND11.3 trillion ($499.56 million) buying a total of 78.38 million shares, equalling a 5.4 per cent stake in Vinamilk. The share volume bought was equal to 60 per cent of the shares put on sale.

As a result, the remaining 40 per cent of the offered shares were unmarketable, unlike in the second round where the whole stake volume found a new owner.

Vinamilk is among the firms named in SCIC’s divestment plan in the 2017-2020 period.

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By Ha Vy