PAN Group offers to buy over 7.7 million Bibica shares
Vietnamese agriculture and food company PAN Group Joint Stock Company (PAN) has just offered to buy more than 7.7 million shares of Bibica Corporation, one of the leading confectionery businesses in Viet Nam.
The shares are equivalent to 49.93 per cent of Bibica's outstanding voting shares. The expected bid price is VND68,500 per share.
If the deal is secured at this price, PAN Group is expected to spend about VND527 billion (US$22.6 million) to own the shares. This capital comes from equity and other legal capital of the company. PAN aims to increase its long-term ownership in Bibica through the deal.
On the stock market, Bibica shares (BBC) have stood at a low level in recent years. BBC closed last week at VND61,300 per share and increased to VND67,900 per share on Thursday after the news about PAN Group's offering.
Bibica's business results have seen progress in recent years. In 2018, Bibica’s revenue reached nearly VND1.4 trillion, an increase of 10.5 per cent compared to the previous year. Post-tax profit touched over VND110 billion, up 13.26 per cent year-on-year, exceeding 11.7 per cent of the profit target assigned for the whole year.
Bibica currently has two major shareholders. Lotte Confectionery owns 44.03 per cent of Bibica's charter capital, while PAN Food, a subsidiary of PAN Group, is holding 50.07 per cent.
PAN Food has officially invested in Bibica since 2015 and gradually increased ownership in Bibica. PAN Food plans to apply the 3F formula (Feed – Farm – Food) when investing in Bibica and participating in the food industry.
In Bibica, it is said that the Vietnamese board of directors are in conflict with the Korean investor, Lotte Confectionary, about the company's development strategy. Bibica CEO Truong Phu Chien had previously told the media that Bibica expected a comprehensive partnership with Lotte in terms of management expertise, technology and export support, but the Korean investor only wanted to make it a subsidiary.
At the beginning of 2019, in an interview with the media, the Bibica CEO said he was relieved as PAN Food finally had become a controlling shareholder of Bibica so a long-standing brand of Viet Nam will be preserved.
Regarding PAN Group's public bid to buy Bibica shares this time, there is a high possibility that Lotte Confectionary had accepted to divest capital from Bibica and PAN Group may acquire all the remaining shares of Bibica.