Vietnam is seeking to raise at least US$4.8 billion (S$6.5 billion) in the country's biggest stake sale as an offering in a state-run brewer attracts potential bidders including Anheuser-Busch and Asahi Group Holdings.
The government, which owns almost 90 per cent of the Saigon Beer Alcohol Beverage, will offer 53.6 per cent of the brewer in a Dec 18 sale, said Mr Truong Thanh Hoai, the Industry and Trade Ministry's head of industry department, at a briefing yesterday in Ho Chi Minh City.
The initial price has been set at 320,000 dong a share, he said. That will be about 29 per cent more than the average trading price over the past six months through Tuesday.
Foreign investors are limited to 38.59 per cent in the brewer since 10.4 per cent of stock is already held by shareholders from overseas.
The auction has attracted interest from 15 large foreign investors including Asahi and Anheuser-Busch, said chairman Vo Thanh Ha of Sabeco, as the company is called. The shares will be offered in a single tranche.
Vietnam, whose communist government has embarked on a plan to divest from some of the country's biggest companies, is attracting attention from investors in its growing market. An expanding middle class and youthful population helped drive a 300 per cent surge in beer demand since 2002, according to Euromonitor International, which estimates the market was worth 147.2 trillion dong (S$8.7 billion) last y ear.
The country's biggest brewer had 40.9 per cent share of the market, followed by Heineken's 23 per cent, and Hanoi Beer Alcohol and Beverage's 18.4 per cent, according to Euromonitor.
Shares of Sabeco have more than doubled since its listing last December on expectations of the stake sale, which the government announced in August last year.
Last month, Vincom Retail JSC's existing investors raised 16.1 trillion dong in what was the country's biggest first-time share sale.
Some investors may not find the price attractive, according to director Tyler Cheung of institutional clients at ACB Securities. "The pricing appears a bit expensive for a financial investment and could deter domestic investors," he said.
It "could still be attractive to a foreign strategic partner keen on accessing the impressive 40 per cent plus market share Sabeco holds in one of the most attractive beer markets in the world".
Asahi is among firms that has said earlier that Sabeco is too expensive.
The government is also divesting stakes in Hanoi Beer Alcohol and Beverage as a growing budget deficit forces the leadership to accelerate a plan to cut holdings in state-owned firms. The sale of the brewer known as Habeco is expected to be completed in the first quarter of next y ear, Mr Hoai said.