Dairy Farm International mulls Big C bid

Reuters reports Hong Kong headquartered Dairy Farm International is in talks with its banks about a potential bid for Big C Thailand and Vietnam.

But Dairy Farm would need a “punchy bid” to fight off frontrunner, Thailand’s Central Group, which already has a 25 per cent stake in the business, the news agency concluded.

In a surprise move, France’s Casino group announced earlier this month it would sell its 58.6 per cent stake in the Thai hypermarket business in a bid to reduce debt. It had already put its struggling Vietnam business on the market in December.

Reuters has also named Japan’s Aeon and Korea’s Lotte as potential bidders, saying both companies had discussed the opportunity and Lotte had held initial discussions with banks.

Casino Group will sell both businesses in an auction process – and has indicated it would prefer to sell the two operations to a single buyer.

With a cornerstone stake in the Big C operation, Central would have to be frontrunner to secure Casino Group’s share. The company has already publicly declared its interest.

“Whoever is going to buy this will have to pay a high price to get Central out or they will have to co-exist,” Reuters quoted an unnamed banking source “familiar with the matter”.

The Thai stake is estimated to be worth about US$3.1 billion. The value of the Vietnam operation is less clear – bankers put it at between $800 million and $1 billion, although the business is not thought to be particularly profitable, despite recent media commentary to the contrary.

Dairy Farm has declined to comment on the matter.

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