Danish brewer Carlsberg A/S must pay market price if it wants to acquire a majority holding in the Hanoi Beer Alcohol Beverage Corp. (Habeco), Vietnam’s second-largest brewer, according to Deputy Prime Minister Vuong Dinh Hue.

 

Carlsberg and the Vietnamese brewer are working out issues in their negotiations as the former seeks to take over the latter, Deputy PM Hue told foreign newswire Bloomberg.

The European beer giant wants to increase its stake in Habeco to 61.79 per cent from 17.51 per cent, Mr. Tayfun Uner, former CEO of Carlsberg Vietnam, said in late 2016.

Carlsberg, which became a strategic shareholder in Habeco in 2008, holds priority purchase rights for a 60 per cent stake.

It has been in discussions with the Vietnamese Government over its first right of refusal, which has been the biggest hurdle to the sale of Habeco shares, Deputy CEO Mr. Vuong Toan told reporters last September.

The government and Carlsberg have held several rounds of talks on the sale, and the largest hurdle to a final deal is not the volume of shares but the price.

Mr. Uner has said that Habeco’s recent share rally is “mainly due to speculative buying on very thin volumes” and a reasonable valuation would be VND48,000 ($2.12) per share.

Habeco shares have risen 57 per cent over the last six months, exceeding the 38 per cent gain in the VN-Index. The brewer trades at 41 times estimated earnings for the next 12 months, compared to 33 times for Sabeco, and is about twice the valuations of Carlsberg and other global brands such as Kirin Holdings Co. and Heineken NV.

The government last December sold a 53.6 per cent stake in the Saigon Beer Alcohol Beverage Corp. (Sabeco), the country’s largest brewer, to Thai Beverage for $4.84 billion at auction. The shares changed hands at VND320,000 ($14) each, nearly 10 per cent higher than the market price.

“The initial price of these shares is based on prices in the 20 most-recent trading sessions,” Deputy PM Hue said. “These companies are not allowed to sell below the floor price the government has set.”

Vietnam is sending a message to investors that it will bargain hard to get the highest price for government assets, especially those considered to be “crown jewels” - Sabeco last December and now Habeco - said Mr. Marc Djandji, Head of Institutional Sales at Viet Dragon Securities in Ho Chi Minh City.

VN Economic Times