Vinamilk shares jump on US$4 bln stake offer report

Vinamilk rose 5% to a record intraday high of 123,000 dong (US$5.52) following a report in The Saigon Times, which cited an unidentified chief executive of a foreign fund represented on Vinamilk's board.

The government has instructed its State Capital Investment Corporation (SCIC) to sell out of Vinamilk, a company 11.03% owned by F&N subsidiary F&N Dairy Investment.

"F&N has not submitted any offer letter to Vinamilk or the SCIC with regard to any possible offer to purchase SCIC's stake," F&N said in a statement.

Representatives of Vinamilk, or Vietnam Dairy Products JSC, were not available for comment.

Vinamilk has a market value of US$6.3 billion, so a US$4 billion purchase would surpass SCIC's US$2.8 billion stake.

"It's not surprising," said analyst Tran Minh Hoang at Vietcombank Securities.

A production line is pictured at a Vinamilk plant in Binh Duong Province, located in southern Vietnam. Photo: Tuoi Tre

"Vinamilk is one of the top companies in Vietnam with good business results and promising prospects."

An F&N offer would be the latest move by Thai tycoon Charoen Sirivadhanabhakdi to expand in Vietnam and tap strong economic and retail growth in a country of 90 million people.

Charoen, ranked Thailand's second-richest man by Forbes Magazine, controls 88% of F&N through Thai Charoen Corp Group (TCC) and his flagship Thai Beverages PCL.

TCC subsidiaries have shares in a top Hanoi hotel and own more than 100 Vietnamese convenience stores.

ThaiBev is also interested in Vietnamese state brewer Sabeco, its CEO said in May.

Vichate Tantiwanich, ThaiBev's senior vice president, said no move had been made for a larger share of Vinamilk.

"We already have a stake through F&N," he told Reuters.

Increased interest in Vinamilk has long been anticipated, buoyed by new laws allowing 100% foreign shareholdings in many equities.

But would-be investors are awaiting clarity on which firms can be wholly foreign owned.

SCIC has been instructed to divest from Vinamilk and nine other firms, but at a time of its own choosing.

Dang Quyet Tien, vice head of the finance ministry's financial department for enterprises, said foreign ownership in Vinamilk would not be restricted.

"There's no limit right now," he told Reuters. "But it's up to SCIC how it wants to sell its stake."

Vinamilk closed up 2.56% at 120,000 dong at the midday break.