Sizable divestment and M&A deals due next months

According to experts, the government is speeding up state divestment in a number of big firms in the remaining months of the year.
Statistics from the VNDirect Securities Corporation showed that expected initial public offerings (IPO) in the fourth quarter of 2017 feature big names such as the PetroVietnam Power Corporation (PV Power), PetroVietnam Oil Corporation (PV Oil), Binh Son Refining and Petrochemical Company Limited (BSR), Vietnam Rubber Industry Group (VRG), and Vietnam Southern Food Corporation Limited (Vinafood 2).

Binh Son Refining and Petrochemical Company Limited, owner of the Dung Quat Refinery, plans to IPO on November 7, 2017.

In particular, BSR, owner of the Dung Quat Refinery, plans to IPO on November 7, 2017 with a reference price of VND14,600 (US$0.65) per share, at around 5 to 6 per cent of total shares with hope to sell a 49 per cent stake to a strategic partner in 2018.
PV Oil also expected to hold an IPO in the last two months of 2017, but has not announced any specific time period. The company hopes to sell 20 per cent of its shares at a starting price of VND14,300 ($0.636) per share.
At the same time, PV Oil will also sell 44.7 per cent of its shares to strategic partners, 0.2 per cent of shares to employees to reduce the level of State ownership from 100 per cent to 35.1 per cent.
Similarly to PV OIL, VRG’s IPO in the fourth quarter of 2017 would put on offer 13.14 per cent of its shares, at a reference price of VND 13,000 ($0.57) per share. In order to reduce the state ownership to below 51 per cent, VRG will sell 11.9 per cent of shares to strategic partners and 1.24 per cent of shares to employees.
PV Power also plans to sell 20 per cent of its shares in December 2017, at the expected starting price of VND14,329 ($0.637) per share, reducing state ownership at PV Power to below 51 per cent.
For the past five years, IPOs by the Vietnam Airlines Corporation (ACV), Vietnam Textile and Garment Group (Vinatex), Vietnam Engine and Agricultural Machinery Corporation (VEAM), or Vietnam Pharmaceutical Corporation (Vinapharm), have been phenomenal.
Therefore, the upcoming IPOs are expected to attract an even larger number of investors, so that part of the capital flows in the listed market will be withdrawn to participate in these new IPOs, leaving a considerable impact on the stock market.
According to Mergermarket, M&A activities in Vietnam have so far this year reached US$1.218 billion in 37 deals.
Vietnam’s back on the radar for investors, said Mergermarket’s South East Asia Office Chief Riddhima Saxena, adding that consumer, healthcare, and education continue to be attractive given the population and growing consumption demand. The most active investors remain Japan and South Korea.