Royal Golden Eagle, Asia Pulp & Paper in final race for Essity's Vinda stake -sources

Vinda International Holdings

12/12/2023 07:07

By Kane Wu and Yantoultra Ngui
       HONG KONG/SINGAPORE, Dec 12 (Reuters) - Two Southeast
Asian paper makers, Royal Golden Eagle (RGE) and Asia Pulp &
Paper (APP), have emerged as final bidders for Swedish tissue
maker Essity's  ESSITYa.ST  52% stake in Hong Kong-listed Vinda
International  3331.HK , three people with direct knowledge of
the matter said.
    A deal for tissue and diaper maker Vinda could be reached
before Christmas, if either offer proves satisfactory, said two
of the people, who declined to be identified as the information
is confidential.
    RGE is making a full cash offer while APP's bid comes with
the need for financing from lenders, according to two of the
people.
    An offer would likely represent a small premium to Vinda's
market price, one of the sources said.
    The company's shares were at HK$20.60 by the midday trading
break on Tuesday, valuing Essity's stake at HK$12.8 billion
($1.64 billion), LSEG data showed. Vinda's shares have dropped
10% so far this year.
    RGE declined to comment. Essity, Vinda and APP did not
respond to requests seeking comment. 
    Essity kicked off a bidding process for its stake in May
which attracted private equity firms including Bain Capital, CVC
Capital Partners and DCP Capital, as well as Vinda's Brazilian
supplier Suzano  SUZB3.SA , Reuters has reported.
    An offer could also lead to a buyout of the company, Vinda
has said.
    RGE, a Singapore-headquartered group owned by Indonesian
billionaire Sukanto Tanoto, and Indonesian pulp and paper
company APP emerged as serious bidders late in the process and
remained in the discussions as other bidders were sidelined, the
people said.
    Negotiations are fluid and may not result in a deal, the
sources cautioned.
    Essity's sale of its Vinda stake comes as multinational
companies are reviewing their presence in China or holdings in
Chinese businesses, amid heightened geopolitical tensions and
China's economic slowdown.
    The Swedish maker of hygiene products has said it wants to
reduce its consumer tissue division's share of group sales by
selling off its Vinda stake.
    Founded in 1985, Vinda's core business segments include
tissues, sanitary napkins and adult and baby diapers.
    It has eight brands and 13 production bases, 10 of which are
in mainland China, according to the company's website.
    Hong Kong Stock Exchange filings show RGE's Managing
Director Belinda Tanoto, the daughter of Tanoto, built a 7%
stake in Hong Kong-listed Vinda via Beaumont Capital Fund in
October.
    Founded by Tanoto in 1973, RGE has expanded into a group of
resource-based manufacturing companies in businesses ranging
from pulp and paper to energy with more than $30 billion in
assets and 60,000 employees, its website showed.
    Jakarta-based APP was founded in 1972 and owns dozens of
pulp and paper mills and more than a million hectares of
forests, its website showed. APP is part of Indonesian
conglomerate the Sinar Mas Group founded by the late Indonesian
business magnate Eka Tjipta Widjaja in 1938. 

($1 = 7.8048 Hong Kong dollars)

 (Reporting by Kane Wu in Hong Kong and Yantoultra Ngui in
Singapore; Editing by Jacqueline Wong)
 ((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging:
kane.wu.thomsonreuters.com@reuters.net))