Indofood offers $488m to take over Minzhong
INDONESIA'S Indofood Sukses Makmur has made a takeover offer for Singapore-listed China Minzhong Food Corp, after an attack by a short-seller wiped off almost half of the Chinese firm's market value.
Indofood, the biggest shareholder in Minzhong with a 29.3 per cent stake, offered S$488 million cash for the rest of the vegetable processor, the Jakarta-based company said yesterday in a statement.
The move comes after the food producer saw its stock-market value plunge to US$273 million (S$348 million), following a 49-page report by California-based Glaucus Research on accounting issues at the company.
Minzhong, whose shares had been suspended since last week, has strongly rejected any suggestion of irregularities.
The Chinese firm more than doubled to S$1.125 at the close in Singapore yesterday, as it resumed trading for the first time since Aug 26.
"I think Indofood sees some form of synergistic value, because Minzhong is more in the upstream raw-material business and Indofood makes noodles," said Mr Roger Tan, chief executive of Voyage Research in Singapore.
"Thanks to Glaucus, the price is a lot cheaper and Indofood can make a takeover at a much lower price. By taking it private, Indofood will also have more flexibility to integrate it into its business."
On Sunday, Minzhong issued a strong defence of its business, saying it strongly rejected what it viewed as "reckless opinions" and "inferences" drawn by Glaucus.