Carlsberg balks at Vietnam beer price as stake sale heats up

Bottles of Hanoi Beer are seen displayed for sale at a mini-mart in Hanoi.
Bottles of Hanoi Beer are seen displayed for sale at a mini-mart in Hanoi. PHOTO: REUTERS

HANOI (BLOOMBERG) - Carlsberg, the Danish brewer that wants to buy a majority stake in Hanoi Beer Alcohol Beverage, said a surge in the Vietnamese company's share price has been fueled by speculative buying, setting the stage for heated negotiations in Southeast Asia's fastest-growing beer market.

A near tripling of Habeco's price since its Oct. 28 listing on Vietnam's regulated over-the-counter exchange doesn't accurately reflect the underlying value of the business as it's "mainly due to speculative buying on very thin volume," Tayfun Uner, chief executive officer of Carlsberg Vietnam, said in an interview in Hanoi.

Habeco shares closed as high as 144,700 dong (S$9.13) this month after initially being listed at 39,000 dong, a price Uner described as fair. The government announced in August it wants to sell its 82 per cent stake for US$404 million (S$576.6 million), or about 48,000 dong a share, which according to Mr Uner is a reasonable valuation.

Vietnam is in the midst of restructuring state ownership of Habeco in the north and top brewer Saigon Beer Alcohol Beverage, known as Sabeco, in the country's south. The potential divestment is drawing interest from the world's largest brewers including Heineken, Anheuser-Busch InBev NV and Asahi Group Holdings, who are keen on Vietnam's young population and rising middle class in one of the world's fastest-growing economies.

"We want to support the Vietnamese government to make a success out of this, which means obviously to get a fair price and to ensure their success of the privatization," said Mr Uner. Habeco's selling price should also reflect that its market position has dropped to third from second since the brewer purchased stakes in 2008, he said.

Carlsberg has been in talks with the Ministry of Industry and Trade to purchase a 61.79 per cent holding and plans to also bid for another 20 per cent stake that the government will sell at an auction, Mr Uner said. It currently owns 17.51 per cent.

The remaining 0.7 per cent - currently traded on the country's Unlisted Public Company Market exchange - is owned by other minority shareholders. Those shares fell 2.1 per cent to 105,000 dong on Thursday while Carlsberg shares fell 0.4 percent in Copenhagen.

"It is very possible the government will take the market price as reference for the stake sale," said Marc Djandji, head of institutional sales at Rong Viet Securities Corp. "Considering the small amount of shares available, if the government relies on the market price, it's just an artificial price. So the concern of Carlsberg is understandable."

Carlsberg, which has been waiting since last year for government permission to boost its stake in Habeco, has a first right of refusal for the sale, Mr Uner said. The Danish brewer plans to compete with other bidders for the 20 per cent stake being sold at auction, and expects the government to sell it the larger holding at the winning auction price, he said.

If the government fails to sell the entire 20 percent stake during the auction process, Carlsberg would be willing to buy the 61.79 per cent holding at a price per share equivalent to its 2008 initial stake purchase, Mr Uner said.