Nguyen Kim Holdings bids to acquire Lam Dong Pharmaceutical

Wednesday, Nov 07, 2018 17:53

Nguyen Kim first invested in Lam Dong Pharmaceutical in 2014, and has been attempting to acquire a controlling share ever since. — Photo

Nguyen Kim Investment and Development Joint Stock Company (Nguyen Kim Holdings) has submitted a public bid to purchase more than 2.1 million shares of Lam Dong Pharmaceutical Joint Stock Company, aiming to control the drug maker.

This purchase would be equivalent to 27.14 per cent of total voting shares in Lam Dong Pharmaceutical. If the deal goes through, Nguyen Kim will raise its stake to 51.14 per cent.

The offering price is set at VND23,500 (US$1) per share, which means Nguyen Kim will pay about VND50 billion.

The transaction is expected to take place between November 30 and December 30.

After the acquisition, Nguyen Kim is committed to developing the core business of the pharmaceutical company, including oriental medicine production, commercial medicines, medical equipment and importing drugs, it said in the open bid letter.

Lam Dong Pharmaceutical JSC is an affiliate of Nguyen Kim, which already holds 24 per cent of the drug company’s charter capital.

Starting in 2017, Nguyen Kim has attempted to buy more shares of Lam Dong Pharmaceutical to turn it into a subsidiary; however, its previous bids for the State Capital Investment Corporation’s portion of the pharmaceutical firm were unsuccessful.

Shares of Lam Dong Pharmaceutical (ticker: LDP) on the Ha Noi Stock Exchange have declined 41 per cent this year to around VND20,000 per share, the lowest in the past two years.

Performance of the drug company was not satisfactory with a loss of VND3 billion in the third quarter – its third consecutive losing quarter – bringing its nine-month loss to VND9.3 billion. It posted a net profit of VND14.8 billion in the same period of last year.

Nguyen Kim Holdings has a capital of up to VND5 trillion ($214.6 million), and is currently owned by Nguyen Kim, chairman of the Nguyen Kim Trading Company which also owns the Nguyen Kim electronics chains.

Nguyen Kim started investing in pharmaceuticals in 2014 after purchasing a 10 per cent stake in Lam Dong Pharmaceutical. After that, it increased its capital in the company to 24 per cent. It has also invested in FT Pharma.

In recent years, many electronics companies have moved into the distribution of drugs, including Mobile World Group’s investment in the Phuc An Khang drug chain, or FPT Digital Retail Company’s investment in Long Chau Pharmacy. — VNS

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