Sacombank takeover firestorm cooling down

Manoeuvers in the dark for a takeover of listed Sacombank (STB) were out in the open after Eximbank (EIB) in early March sent a letter to Sacombank chairman Dang Van Thanh asking Sacombank to re-elect its board of directors. Eximbank then cited that the bank and its allies were holding more than 51 per cent of the voting shares of Sacombank.

However, a reliable source close to Eximbank last week told VIR that the two banks had just  come up with an agreement about Sacombank’s board members. The source declined to be identified citing the sensitivity of the information.

Accordingly, the Sacombank board will comprise 11 members, of which four will come from Sacombank and five from a large shareholder group of which Eximbank is the authorised representative. The remaining two are independent board members. Sacombank’s current board for 2011-2015 includes seven members Sacombank and Eximbank are two of Vietnam’s strongest joint stock commercial banks.

The source said it was likely that Thanh would continue to be Sacombank’s chairman for “an additional period of time”, while the large shareholder group that Eximbank represents would assign its people to take the general director and head of supervisory board position.

The source added Eximbank and its allies were holding a 51 per cent stake of Sacombank’s equity which meant 56.5 per cent of the voting rights (excluding 10 per cent treasury shares that Sacombank bought back last November).

Sacombank is yet to decide the timeline for its general shareholder meeting this year. Personnel structure is expected to be one of the issues overshadowing the meeting.

Previously, in the first week of March, Sacombank shareholder Temasek Holdings sold 21.9 million Sacombank shares, equal to a 2.04 per cent stake in the bank, with the transaction valued at VND500 billion ($24 million).

Temasek is the fourth institutional shareholder of Sacombank, after Dragon Capital, ANZ and Refrigeration Electrical Engineering Corporation (REE) to sold its  shares in the embattled bank.
Dragon Capital and REE sold their 8.17 and 3.92 per cent holdings in Sacombank last year, and ANZ offloaded 9.61 per cent in January.

The news of the agreement is believed to have led to the fall in the share prices of the two banks since the beginning of last week after weeks of rallies fuelled by acquisition information.

On March 8, EIB closing price was down 13.7 per cent against the March 5 price – VND20,400 ($0.97) to VND17,600 ($0.84) per share. At the same time, the EIB share price dropped 12 per cent to VND20,500 ($0.98) from VND23,300 ($1.10).