Foodstuff producer Kido Group (KDC) has decided to acquire a controlling stake in Vietnam Vegetable Oil Industry Corporation (Vocarimex) in a deal worth nearly VND1 trillion (US$44 million).
In a filing to the State Securities Commission on Wednesday, Kido registered to purchase nearly 32.9 million shares in Vocarimex to increase its holding there from 24 per cent to 51 per cent.
The purchase will be conducted through negotiations from May 4 to June 2.
Vocarimex’s shares (VOC) are traded on the Unlisted Public Market Company (UPCoM) for about VND30,000 (US$1.32) each. At this price, Kido is estimated to spend almost VND987 billion ($43.5 million) for the deal.
After the announcement, VOC shares increased 8.5 per cent in the last two sessions. The shares have increased 5.2 per cent this year.
In January this year, the vegetable oil producer approved Kido raising its stake, bypassing the obligation of making a public bid to purchase shares.
On Monday, VP Bank Securities Co (VPBS) announced it sold its entire holding of 9.74 million VOC shares, equivalent to 8 per cent of Vocarimex’s capital.
Apart from Kido, the State Capital Investment Corporation (SCIC) is the second biggest shareholder with a 36.3 per cent.
Vocarimex is one of the largest local vegetable oil firms, with Kido aiming to seize a controlling stake to penetrate deeper in vegetable oil market after its withdrawal from the confectionery sector.
Besides Vocarimex, in November 2016, Kido spent more than VND1 trillion to buy a 65 per cent stake in Tuong An Vegetable Oil Joint Stock Company (TAC). This acquisition is reportedly boosting Kido’s performance.
The company announced its first-quarter consolidated revenues soared 217.4 per cent year-on-year, totaling VND1.25 trillion, after acquisition of Tuong An Vegetable Oil. Its after-tax profit rose 9.4 per cent to VND30.1 billion.
However, revenues of the parent company Kido Group declined 74 per cent from VND162.7 billion in 2016’s first quarter to just VND42.3 billion in the first three months of this year.
Kido attributed the decline to the group’s business model transformation in which it gives more autonomy for subsidiary and affiliate firms in doing business while the parent company plays key role in planning strategic development, risk management and brand marketing. – VNS