HA NOI — The fight for control of Sacombank between its leaders and Eximbank (EIB) is raising concerns among many enterprises over the possibility of a similar hostile takeover aimed at their companies.
|Clients make deposits at Sacombank's branch in Ha Noi. — VNA/VNS Photo Tran Viet
Some enterprises are purposely collecting shares in at-risk companies in a bid to prevent any takeovers on the market, a move which has substantially boosted the volume and value of many shares.
This phenomenon can be seen in the heavy trading of Ha Noi Housing Bank (HBB) shares.
Although the lender posted lower-than-expected business results in 2011, with net profits decreasing by 45 per cent year-on-year to just VND262 billion (US$12.5 million), more than 14 million shares of HBB were traded yesterday at the ceiling price.
In total, about 60.6 million HBB shares changed hands this week, with prices rising by 15.5 per cent from VND4,500 last Friday to VND5,200 yesterday.
Many investors, regardless of their investment purposes, believe that the current price for HBB shares is "too attractive", making a takeover a real risk. They said they would increase their buying to push up the share price.
Purchase power has also concentrated on stocks in other banks and securities companies. Many shares posted gains for the whole week with trading volume ranging from over 1-5 million shares, including Military Bank (MBB), Sai Gon-Ha Noi Bank (SHB), PetroVietnam Finance (PVF), Bao Viet Securities (BVS) and Au Viet Securities (AVS).
According to market insiders, M&A (merger and acquisition) activity in Viet Nam had been unremarkable in recent years. Last year's deal which saw Masan Group (MSN) acquire more than 50 per cent of Vinacafe Bien Hoa (VCF) marked the development of this market, but it was not until the war between Sacombank and Eximbank began that it became an active topic of discussion.
Although rumours on the Sacombank and Eximbank situation have not been verified, the market figured it out by watching the gradual collection of shares and observing that the bank had made persuasive requests for shareholders to give authorisation for the deal.
Tran Dinh Cuong, deputy general director of Ernst&Young Viet Nam, told VnEconomy website that Viet Nam had yet to see any bank mergers other than a compulsory merger under the direction of the central bank. However, there were deals that involved one bank buying shares of other banks and participating in that bank's management body.
"The trend of changing bank owners is inevitable," Cuong was quoted as saying. "This phenomenon was predicted many years ago. Now is the time for this to happen more quickly and voluntarily."
Dang Doan Kien, chief representative of Aureos Capital Viet Nam, reportedly forecast that acquisitions in the banking industry this year would not be as exciting as events in the real estate and consumer goods industries because banking sector investments would still face burdensome legal proceedings.
Recently, the central bank's HCM City branch issued a document preventing the Electricity of Viet Nam (EVN) from transferring its 5.3 per cent stake in ABBank to HDBank, arguing that the central bank had not detailed guidance for this type of transfer. — VNS