Masan Group Corporation (MSN) plans to buy all outstanding common shares in Masan Resource Corporation (MSR), the largest tungsten firm in the world, through its wholly-owned subsidiary. In its tender offer announcement on Monday, the company said it intends to purchase MSR shares for VND15,500 per share to increase its current 72.7-per cent ownership.
Masan expects to complete the purchase before the end of this year, subject to corporate and regulatory approval.
Masan Resource's shares are trading on the Unlisted Public Company Market (UPCoM). With charter capital of nearly VND7.2 trillion, it is one of the biggest stocks here by market capitalization. Its price is around VND14,800 a share.
The company owns and operates the polymetallic Nui Phao Mine in northern Viet Nam, reportedly the world's largest identified tungsten mine with a reserve of 66 million tonnes. This mine is also among the largest producers of acid-grade fluorspar and bismuth in the world.
These rare metals have strategic significance for many industries today, including metalworking, mining, oil and chemical industries, besides the construction sector.
The proposed tender offer would be open to all common shareholders of Masan Resource on a voluntary basis, allowing existing shareholders to either monetize their investment at Masan Resource's book value or continue to participate in the resource company's next strategic phase of development.
MRC Ltd, the largest foreign investor in Masan Resource with a 20.24-per-cent equity stake, "has expressed interest in selling into the tender offer as part of a broader restructuring of its holding", Masan Group said in its statement.
MRC Ltd is an investment fund co-managed by the US Fortress Investment Group and Mount Kellett.
Masan Group plans to fund the purchase through a combination of $35 million in two-year debt and an issuance of 12 million primary shares at a price of VND95,000 per share.
This share price is much higher than the price of Masan Group's stocks, which are trading on the HCM Stock Exchange at around VND66,000 a share.
"Masan Resource is expected to gain greater strategic flexibility to achieve its objective of transforming the global tungsten market with longer-term capital," the statement said.
Masan Resource reported nine-month revenues of over VND2.8 trillion, up 78.5 per cent over the same period of last year. Its net profit increased 52.8 per cent during the period, hitting VND110.6 billion by the end of September.