VietNamNet Bridge – Masan Consumer Holding, the consumer goods arm of Masan Group (MSN), plans to spend VND1.62 trillion (US$76.8 million) to buy back 18 million shares of the company by the end of this year.

The deal will be carried out from December 2-31 through Viet Capital Securities Co. — Photo vinacorp

The price is expected to be VND90,000 ($4.27) per share, which would raise the group's market capitalisation to more than VND47.8 trillion ($2.26 billion). The buyback is equivalent to 3.39 per cent of the company's outstanding shares.

The deal will be carried out from December 2-31 through Viet Capital Securities Co.

As of June, Masan Consumer had nearly VND4.14 trillion ($196.2 million) in cash. The company plans to use its surplus capital of VND5.1 trillion ($241.7 million) to fund the purchase.

Masan Group is currently its biggest stakeholder with a holding of 76.85 per cent. After the deal, MSN holdings are expected to increase to 79.55 per cent.

Early this month, Masan Consumer announced a public tender to buy 49 per cent of food producer Cholimex Food Joint Stock Co. The deal is expected in the last quarter of this year or the first quarter of next year.

With shares priced at VND90,000, the company will pay VND375 billion ($17.8 million), 21 times Cholimex Food's 2013 earnings. Cholimex Food is valued at VND730 billion ($34.6 million).

In a move to spend cash, Masan Consumer announced in April that it would spend VND5.8 trillion ($274.9 million) to pay cash dividends for last year's earnings and part of this year's payout.

In the last four years, the consumer foods company reported a net profit of over VND1 trillion ($47.4 million) each year but has never paid dividends.

In 2013, Masan Group earned a net profit of VND3.1 trillion (nearly $147 million). This year, it has set a revenue target of VND16-17 trillion ($758-806 million) and an after-tax profit of VND3.75-4.25 trillion ($178-201 million).

VNS/VNN