Masan Unit Offers to Buy 50.11% of Vinacafe Bien Hoa

Masan Consumer Corp., a unit of Vietnam’s biggest publicly traded company, offered to buy 50.11 percent of Vinacafe Bien Hoa Joint-Stock Co., according to a statement on Vinacafe’s website.

The Masan Group Corp. subsidiary plans to buy 13.32 million shares between Sept. 12 and Oct. 11, Vinacafe said in the statement, without giving a price or reason. The coffee producer’s board will discuss the offer Sept. 13, Deputy General Director Le Hung Dung said by phone. Masan spokesman Brad Jaffe said he couldn’t comment immediately.

Masan’s unit is seeking control of the coffee roaster after the group told investors in April it had a “war chest” of as much as $500 million for acquisitions, according to an annual general meeting presentation posted on the company’s website. Smaller consumer companies may become targets for further acquisitions in Vietnam as they offer higher margins, growth and protection against accelerating inflation, said Adrian Cundy, head of research at VinaSecurities Joint-Stock Co.

“Masan appears to be executing on its stated acquisition strategy,” said Cundy. VinaSecurities is the securities unit of the country’s biggest fund manager. “Coffee is a big part of the Vietnam consumer story, and they are buying a controlling stake. For Vinacafe, it shows that control and good consumer brands are worth a market premium.”

Vinacafe Bien Hoa climbed 4.7 percent to 100,000 dong as of the 11 a.m. local-time close, the highest since the company was listed in January. Masan Group rose 4.3 percent to 122,000 dong, the highest since May 12. The benchmark VN Index of the Ho Chi Minh City Stock Exchange gained 0.1 percent.

KKR Investment

Masan Consumer agreed in April to sell a 10 percent stake to KKR & Co., the investment firm managed by Henry Kravis and George Roberts, for $159 million, in the largest private-equity investment in Vietnam. New York-based KKR is betting Vietnam’s young population and growing middle class will help it generate returns even amid inflation concerns.

Consumer prices rose 23.02 percent in August from a year earlier, the fastest pace since November 2008. That’s the highest inflation rate among 17 Asian economies tracked by Bloomberg.

Masan Consumer, formerly known as Masan Food, is the market leader in fish, soya and chili sauce and the second-largest producer of branded instant noodles in Vietnam, the company said in April.

— With assistance by K Oanh Ha, and Diep Pham

(Corrects month of listing in fifth paragraph.)
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