Shares have become cheaper than ever, which has raised worries among businessmen, because the low prices bring golden opportunities to big guys to swallow other businesses.
At the recent shareholders’ meeting of a joint stock bank, when answering the shareholders’ questions about the time to list shares on the bourse, the manager of the bank said that the board of directors was still considering the issue, while expressing the risk of being swallowed by big investors.
On March 1, TNG, an investment and trade company, announced that the price of shares two individuals offer to buy has increased from 8700 dong to 16,000 dong per share. Besides TNG, many cases of acquiring businesses through open purchase offers have been declared, including the one to purchase Traphaco (TRA) and the Saigon Soft Drink Company (TRI).
In recent years, a lot of such cases have been carried out in a smooth way, because the acquisition has been accepted by the targeted companies, according to Tuoi tre. Meanwhile, the cases, under which the alliances of small shareholders usually faced the strong opposition from the targeted companies, could not bring the desired effects. These included the cases to acquire the Ha Tay Pharmacy (DHT), Descon (DCC). One year after it was swallowed, DCC share listing was canceled in December 2011.
Living in fear
Dai Doan ket newspaper has reported that the stock market seems to get seething on the news that Sacombank, one of the biggest banks in Vietnam, is being swallowed by a group of investors.
A rumor has been spread out in recent days that a bank with the headquarters in the north is now the targeted company of many investors. For the last month, the bank’s shares have been traded in very big quantities.
The trading volume was up to tens of millions of shares at a single trading session. In the 10 trading sessions until March 2, the trading volume of the bank’s shares accounted for 36 percent of their total capital. Investors have made a wild guess that the share collection has kicked off a new attempt to take over the bank.
At another bank, key shareholders and relating people are trying to collect shares, registering to buy the shares in big quantities. The move aims to increase the volume of shares and retain the right to control the bank’s operation.
Not only banks, a lot of other listed companies have become worried stiff as they may become the targets of mammoth investors, who are attempting to swallow other businesses.
Thoi bao Kinh te Saigon has reported that Sacombank’s case has prompted other listed companies to keep their defenses, because they don’t want to be another Sacombank.
General Director of a real estate firm said that the companies in the business field could be the easy prey for the investors with high financial capability. Since the real estate market keeps gloomy, a lot of real estate firms have taken loss, while the shares of the firms have decreased dramatically, even though they have big assets.
The general director said that it is very difficult to stay against the attempt to take over businesses. “Once your company is the target of some big guys, you won’t escape from their trap,” he said.
The problem is that most businesses are in big difficulties. They are so thirsty for capital that they do not have money to buy treasury stocks to prevent the worst things. In principle, they can issue more shares to increase capital. However, in order to do that, the businesses have to make profit. Even if the businesses are profitable, no one can say for sure that the shares would be salable, when the stock prices keep decreasing.
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