Thaibev Unit Registration to bid for $4.8 billion Sabeco shares

Thai Beverage Pcl has emerged as the sole bidder for a majority stake in Saigon Beer Alcohol Beverage Corp. valued at $4.8 billion, as Vietnam said the only other investor is an individual seeking a smaller holding.

Vietnam Beverage, ThaiBev’s domestic unit, registered to bid for 343.66 million or a 53.59 percent stake in Sabeco, as Vietnam’s largest brewer is known, Vietnam’s Ministry of Industry and Trade said in a statement Sunday. An undisclosed individual domestic investor registered to bid for 20,000 shares. In all, the ministry garnered bids for about 343.682 million shares in Sabeco.

Charoen Sirivadhanabhakdi

Photographer: Dario Pignatelli/Bloomberg
Investors bidding on less than 25 percent of the company’s shares had until Sunday to register for an auction of shares in Sabeco that will be held on Dec. 18. Billionaire Charoen Sirivadhanabhakdi controlled Thai Beverage Pcl’s unit was the only company that registered by Dec. 11, the last date for investors seeking more than a 25 percent stake.

ThaiBev and global brewers have been drawn to the heady growth prospects of Vietnam’s beer market. An expanding middle class and youthful population helped drive a 300 percent surge in beer demand since 2002, according to Euromonitor International, which estimates the market was worth 147.2 trillion dong ($6.5 billion) in 2016. Still, many potential bidders may have been put off by Sabeco’s valuation, as the stock has surged 56 percent this year.

The weak response from both local and foreign investors puts ThaiBev in a position to acquire a stake in the brewer. The Thai unit is registered as a local company, making it eligible to take a controlling stake as foreign ownership limits do not apply to it, the ministry said.

The 54 percent stake in Sabeco would be worth about $4.8 billion based on the government’s initial price guidance of 320,000 dong ($14.09) a share.

ThaiBev said Wednesday that it has confidence in the “growth potential of the Vietnam market and has genuine interest in exploring investment opportunities in the country.”

A 53.6 percent stake is being offered in Sabeco, though foreign investors are limited to a 38.59 percent holding. Combined with the 10.4 percent already owned by investors from overseas, that would hit the foreign ownership cap imposed by Vietnam on some public companies.

— With assistance by Luu Van Dat, and Mai Ngoc Chau