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Vietnam auctions a stake of up to $5bn in state-owned brewer Sabeco.
Vietnam auctions a stake of up to $5bn in state-owned brewer Sabeco.

Vietnam brewer Sabeco to auction hefty stake

LIQUOR NEWS

Reuters - Dec 18th 2017, 09:07

Vietnam auctions a stake of up to $5bn in state-owned brewer Sabeco.
 

Thai Beverage is so far the only potential bidder to express an interest in a majority stake.

The keenly awaited sale of the maker of Bia Saigon gained momentum in recent months after being dogged for years by fickle policy making, political resistance and complications
in valuations.

The government set a minimum price of 320,000 dong or $14.10 a share for Saigon Beer Alcohol Beverage Corporation (Sabeco), the share price of which nearly trebled to 309,200 dong since its listing a year ago.

Thai Beverage, through a partly owned Vietnam unit, is the only company to express an interest in owning more than 25% of the company, which has about 40% of the beer-loving Vietnamese market.

But so far no formal bid has been made.

Vietnam’s young population and booming economy should make Sabeco an attractive asset for global brewers hoping to expand in Southeast Asia, but a high minimum bid price and limits on foreign ownership appear to have turned off potential buyers.

Sabeco’s foreign ownership is capped at 49%. With 10% already in foreign hands, that leaves only 39% on the table for overseas buyers at Monday’s auction. Locals can bid for a majority stake of up to 54%. Heineken holds a 5% stake. "There’s a disconnect between what the government wants to achieve and how international brewers view this auction," said an insider.

Single offer

"In a normal auction, bidders are fully aware of what stake they’ll end up owning and bid for it accordingly," said the source, who was not authorised to speak to reporters.

Unlike similar sales in developed markets, where investors are whittled down over several rounds and offers can be adjusted, Sabeco bidders need to submit a single offer for a specific number of shares in a sealed envelope in one round.

Thai Bev, controlled by tycoon Charoen Sirivadhanabhakdi, was keen to acquire Sabeco as part of a strategy to expand outside its home market, sources said. The company had already lined up bank guarantees to support the bid by its Vietnam unit, sources said.

There was no immediate response from Thai Bev to news-agency questions.

Reuters reported previously that the auction was drawing the interest of brewing groups such as Anheuser-Busch InBev, Kirin Holdings, Asahi Group Holdings and San Miguel, but there was no clear sign of whether they had participated in the auction so far.

The government’s minimum price for the 54% stake on offer valued Sabeco at about 36 times core earnings, more than double the trading multiples of about 15 for some global peers, according to Reuters data.

Vietnam’s trade ministry is expected to announce the bidding result on Monday afternoon.

Vietnam’s young population and booming economy should make Sabeco an attractive asset for global brewers hoping to expand in Southeast Asia, but a high minimum bid price and limits on foreign ownership appear to have turned off potential buyers.

© 2017 Reuters 

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