By Anuchit Nguyen, Bloomberg
Berli Jucker Pcl (BJC), a consumer-goods producer and distributor controlled by Thailand’s richest man, dropped to a three-week low on concern acquisitions in Vietnam will hurt earnings.
Metro Group has signed an agreement with Berli Jucker Corporation of Thailand on transferring its wholesale business in Vietnam.
Shares of the Bangkok-based company owned by billionaire Charoen Sirivadhanabhakdi slid 3.6 percent to 53.50 baht at the trading break in Bangkok, poised for the lowest close since July 18. It was the biggest decliner in the SET100 Index, a gauge of 100 largest publicly traded companies, which lost 0.3 percent.
Berli Jucker agreed to buy 19 wholesale stores in Vietnam from Dusseldorf, Germany-based Metro AG for an enterprise value of 655 million euros ($876 million) to expand its distribution and retail network in the Southeast Asian country, according to a statement to the Thai stock exchange yesterday. The company said it will use external loans to finance the purchase.
“The acquisition may result in an earnings-forecast downgrade” for Berli, Chaiyatorn Sricharoen, an analyst at Bualuang Securities Pcl, wrote in a note.
Profits will be “squeezed” because of losses at the Vietnamese stores and the financial cost of the deal, Chaiyatorn said. The company will also face higher competition from existing retailers in Vietnam and the potential entry of competitors such as Siam Makro Pcl in the market, he said.
Read the full article by Anuchit Nguyen, Bloomberg.
