Vinda International, based in Hong Kong, has announced that Royal Golden Eagle (RGE), owned by Indonesian billionaire Sukanto Tanoto, has extended an offer to purchase the tissue and diaper manufacturer for a sum of up to HK$26.13 billion ($3.35 billion). RGE emerged as one of the last two contenders seeking to acquire a 52 percent stake in Vinda, currently owned by the Swedish tissue manufacturer Essity, according to insider reports.
RGE's Isola Castle unit has proposed an offer price of HK$23.50 per share, reflecting a 13.5 percent premium over Vinda's closing price. RGE asserts that this offer is nearly 150 percent higher than Vinda's net asset value per share, recorded at HK$9.41 as of June 30 this year. Following the announcement, Vinda shares experienced a surge of up to 8.7 percent, reaching HK$22.50, a level not observed since April.
Essity has stated that the proposed acquisition is contingent upon approval from regulatory bodies, including those in China, and is anticipated to be finalized by mid-2024. This development coincides with a trend where multinational corporations are reassessing their involvement in China or their investments in Chinese enterprises due to increased geopolitical tensions and the economic deceleration in China.
Singapore-headquartered RGE said in a statement that Vinda's two largest shareholders including Essity which owns 72.63 percent of the company have irrevocably undertaken to accept the offer. Essity said in a separate statement it had accepted the offer, which would give it about HK$15 billion in cash proceeds. It had said it wanted to sell off its Vinda stake to reduce its consumer tissue division's share of group sales.
RGE said it has no plans to overhaul Vinda's operations, including any redeployment of the fixed assets or any major changes in Vinda's management or employees. "Vinda's vision is to be Asia's first choice for high-quality hygiene products and services", Belinda Tanoto, RGE Managing Director, said. RGE is looking to tap into Asia's consumer growth to "build a stronger, more efficient and more sustainable business", she said.
In October, Belinda, the daughter of Tanoto, obtained over 7 percent of Vinda through Beaumont Capital Fund, as indicated by filings on the Hong Kong Stock Exchange. Established by Tanoto in 1973, RGE has evolved into a conglomerate of resource-based manufacturing firms, engaged in diverse sectors such as pulp and paper, and energy, amassing assets exceeding $30 billion and employing over 60,000 individuals, according to information available on its website. RGE has enlisted BNP Paribas and CICC as joint financial advisers for the offer.