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Nguyễn Kim Holdings bids to acquire Lâm Đồng Pharmaceutical

Update: November, 07/2018 - 17:26
Nguyễn Kim first invested in Lâm Đồng Pharmaceutical in 2014, and has been attempting to acquire a controlling share ever since. — Photo
Viet Nam News

HÀ NỘI — Nguyễn Kim Investment and Development Joint Stock Company (Nguyễn Kim Holdings) has submitted a public bid to purchase more than 2.1 million shares of Lâm Đồng Pharmaceutical Joint Stock Company, aiming to control the drug maker.

This purchase would be equivalent to 27.14 per cent of total voting shares in Lâm Đồng Pharmaceutical. If the deal goes through, Nguyễn Kim will raise its stake to 51.14 per cent.

The offering price is set at VNĐ23,500 (US$1) per share, which means Nguyễn Kim will pay about VNĐ50 billion.

The transaction is expected to take place between November 30 and December 30.

After the acquisition, Nguyễn Kim is committed to developing the core business of the pharmaceutical company, including oriental medicine production, commercial medicines, medical equipment and importing drugs, it said in the open bid letter.

Lâm Đồng Pharmaceutical JSC is an affiliate of Nguyễn Kim, which already holds 24 per cent of the drug company’s charter capital.

Starting in 2017, Nguyễn Kim has attempted to buy more shares of Lâm Đồng Pharmaceutical to turn it into a subsidiary; however, its previous bids for the State Capital Investment Corporation’s portion of the pharmaceutical firm were unsuccessful.

Shares of Lâm Đồng Pharmaceutical (ticker: LDP) on the Hà Nội Stock Exchange have declined 41 per cent this year to around VNĐ20,000 per share, the lowest in the past two years.

Performance of the drug company was not satisfactory with a loss of VNĐ3 billion in the third quarter – its third consecutive losing quarter – bringing its nine-month loss to VNĐ9.3 billion. It posted a net profit of VNĐ14.8 billion in the same period of last year.

Nguyễn Kim Holdings has a capital of up to VNĐ5 trillion ($214.6 million), and is currently owned by Nguyễn Kim, chairman of the Nguyễn Kim Trading Company which also owns the Nguyễn Kim electronics chains.

Nguyễn Kim started investing in pharmaceuticals in 2014 after purchasing a 10 per cent stake in Lâm Đồng Pharmaceutical. After that, it increased its capital in the company to 24 per cent. It has also invested in FT Pharma.

In recent years, many electronics companies have moved into the distribution of drugs, including Mobile World Group’s investment in the Phúc An Khang drug chain, or FPT Digital Retail Company’s investment in Long Châu Pharmacy. — VNS

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