Ice09-mergers & Acquisitions News

Weekly issued to about 82.000 emails of investors, managers, and investment organizations & groups in Vietnam or overseas

Volunme ICE-09, Thursday September 11th, 2008 ICE – the M & A and project investment connection is the source of useful information for domestic and foreign investors, enterprise owners and corporations. M & A News issued weekly by ICE will provide information of buying and selling enterprises in all business fields as well as investment opportunities in projects throughout Vietnam. In addition, ICE Vietnam M & A News will help foreign investors and enterprise owners to update new investment policies and new information of the M&A market in Vietnam. Main parts: Part 1:M & A Investment Opportunities Part 2:Global M & A market Part 3:Vietnam M&A Market– M&A Doing the Deals

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PART 1: M & A INVESTMENT OPPORTUNITIES M&A-41: Calling for investment in or transferring Complex

Construction Project Location

Cau Giay, Hanoi

Total Land area/

3,397.7 m2

Construction Area Economic indicators of the project Land usage right

/ 1,581 m2 Maximum height : 18 floors Construction density : 46.56 Land use ratio : 7.8 30 years.

Value of Investment

Negotiation

ICE’s Comment SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE–Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

Page 1

M&A AND INTERNATIONAL INVESTMENT CONNECTION M&A-42: Calling for investment in or transferring Villas and Resort

Location

Quy Nhon- Binh Dinh

Business field

Investment and construction of luxurious resorts and tourism & urban areas 10.4 million USD

Total investment

Available legal documents of Completed and sufficient the project Land lease period 50 years Planning indicators of the project Current status of the project

Economic indicators of the project

Key strong points of the project Co-operation forms Transference price

Area: 56.8ha Construction density: 7.42% Storey height: 3.5 Land use coefficient: N/A Compensation and clearing the ground (completed) - Preparing for technical issue to implement project... Period of paying capital (T): Period of paying capital ( excluding reduction:: T = 5 years 2 months. Period of paying capital ( including reduction: T= 6 years 8 months Current value (NPV): NPV = 11.665.000 USD Local returning for per (IRR): IRR = 19,7 % • Key location with international port, universities and a gate of three- cornered leading to East sea and Tay Nguyen • Taking 30 minutes to reach to Quy Nhon city and 20 minutes to get Phu Cat airport. - Joint – venture - Whole transference -

4.5 million USD (included land rental)

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION M&A-43: Calling for investment in or transferring Non-Stop 24h services project Location

Ha Tinh

Business field

Project investment Transportation – Parking lot- Investment Promotionservice, etc…

Total investment

138 billion VND

Available legal documents of the project

Investment certificate, Investment

Economic indicators of the project

NPV ( after 20 years) =

license, etc. 17,040,155,000 VND IRR = 11.12%

Current status of the project Project Land Statue

Pay-back period: 09 years In the process of construction

Co-operation form

Land has been granted for the project developer. Land for lease in 50 years - Area: 126.535m2 - Construction density: Subject to the investment capacity (Unlimited) - Storey height: Unlimited Construction purposes: High-quality mixed services for customers and means of transport, supporting other services in Vung Ang economic zone, etc. Good location, convenient traffic, etc. - Currently, there are a lot of big investors and enterprises investing in Vung Ang Economic zone, thus creating high demand for supporting services Investment Co-operation

Value of Investment

Negotiation

Planning indicators of project

Key strong points of the project

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION M&A-44: Calling for investment in or transferring Project of commercial center and office building for lease Location

Hong Bang - Hai Phong

Business field Total investment

VND 357,17 billions

Available legal documents of the project Total land area

3,067.5 m2

Current status of the project

In the process of construction Average annual revenue: VND 108,241 billion + Average annual expense: VND

Economic indicators of the project

22,449 billion + NPV : VND 79,453 billions + IRR : 15,33 + NPV : VND 79,453 billions + IRR : 15,33 Construction Density: 40%

Key strong points of the project

-

Good location, convenient traffic, Near Haiphong Port…

Co-operation forms

-

Joint – venture Whole transference

Value of Investment

Negotiation

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

Page 4

M&A AND INTERNATIONAL INVESTMENT CONNECTION M&A-45: Calling for investment in or transferring Resort project

Location

Quang Tri

Business fields

Real estate

Total investment

287,924,624 thousand VND

Available legal documents of the Completed and sufficient project Project land status Land for lease in 50 years - Area: 30ha Planning indicators of the project -

Land use coefficient: 0.2 times

Current status of the project Economic indicators of the project

Key strong points of the project

Co-operation forms Value of Investment

Construction purposes: Construction of resorts, hotels, restaurants and entertainment centers Completed clearance and in the process of implementing some fundamental construction items NPV: 326,856,031 thousand VND IRR: 42.95% Pay-back period: 06 years and 03 months (since the beginning day of construction) - This area is still in its primitive state, so the competitive rate is low and the beach is very clean and beautiful. The operation and labor costs are low - Looking for partners to contribute capital to implement to the project - About 30-49% of the project shares

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

PART 2: GLOBAL M&A MARKET Top Global M&A Deals Target

Acquiror

Teranet Income Fund

Borealis Infrastructure Management

Value ($M) 15 427,8

Inc China Huiyuan Juice Group Ltd

Atlantic Industries

2 295,0

25% Interest in Chesapeake's Fayetteville Shale Assets in

BP America Inc

1 900,0

FirstLight Power Enterprises Inc

GDF Suez SA

1 898,8

Sciele Pharma Inc

Shionogi & Co Ltd

1 305,8

Emerald Teresa Coal Exploration Permit

Xinwen Mining Group

1 222,4

China Netcom Group Corporation (Hong Kong) Ltd

Telefonica Internacional SA

1 142,9

Sunrise Third Senior Holdings LLC

HCN Acquiror Inc

643,5

Seven Blocks in the Gulf of Mexico

Ecopetrol SA

510,0

Goal Petroleum (Netherlands) BV

Total SA

480,0

Arkansas

Top Industries: Global M&A Industry

Deals

Value ($M)

Grand Total

9720

674,401.7

Financials

1652

119,081.7

Healthcare

545

87,544.8

Energy

445

87,239.8

Basic Materials

926

84,710.0

Non-Cyclical Consumer Goods / Services

1033

79,906.1

Industrials

2008

63,477.1

Utilities

296

53,385.0

Cyclical Consumer Goods / Services

1657

49,085.0

Technology

970

40,147.8

(Source: Reuters) SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

PART 3: VIET NAM AND M&A MARKET- M&A DOING THE DEALS

Merger and acquisition slows, report finds Mergers and acquisition (M&A) activity in Vietnam is slowing, according to a report recently released by British firm PricewaterhouseCoopers (PwC). In the first half of this year 48 M&A deals, valued at a total of US$347 million, were reported to authorities, significantly lower than the 47 deals valued at $736 million in the same period last year, the report said. Some reasons for the downward trend included companies delaying closing deals because of economic uncertainty or renegotiating prices because the valuations of both domestic and foreign companies had fallen this year. PwC, however, said the actual number of M&A deals may be higher, as privately negotiated transactions may not have been recorded yet. But it expected more M&A activity in the latter half of this year. In the second half of last year, a total of $1.1 billion worth of deals were registered. Foreign investors and analysts said at a seminar in HCMC last month that M&A opportunities in Vietnam looked promising but the government’s regulations were “confusing.” While Vietnam committed to the World Trade Organization to allow foreign investors to own a 99 percent stake in a listed company, it still limited foreign ownership to 49 percent of a joint stock enterprise and 30 percent of a listed bank, they said. In its report, PwC said it believed the government intended to remove obsolete regulations.

NOTABLE DEALS - In January, Swiss Reinsurance Co., (Swiss Re) acquired a 25 percent stake in Vietnam National Reinsurance Co. (VinaRe) for US$81.9 million. As a result of the transaction, Swiss Re became the sole foreign strategic partner of VinaRe. Also in February, Banque Nationale de Paris (BNP) Paribas SA, a listed French bank, doubled its stake in Oriental Commercial Joint Stock Bank (OCB) to 20 percent. OCB is a privately owned Ho Chi Minh City-based commercial bank with 59 branches around the country. The transaction made BNP OCB’s second largest shareholder. - The PwC report said the first of five deals in the securities industry during the first half of this year involved Morgan Stanley acquiring a 48.33 percent stake in a joint venture with Huong Viet Securities for an undisclosed sum. - Malaysia’s biggest bank, Malayan Banking Berhard (Maybank), purchased a 15 percent stake in An Binh Commercial Joint Stock Bank (ABBank) for $135 million in March. Maybank has indicated it is interested in raising its stake to 20 percent, subject to government approval. - In May, the UK-based Standard Chartered Bank confirmed a 6.16 percent purchase of ordinary shares in Asia Commercial Bank (ACB) along with a purchase of 7.1 percent of the bank’s convertible bonds, increasing Standard Chartered’s Investment in ACB to 15 percent of ordinary shares from 8.84 percent, and 15.86 percent of convertible bonds

( Source: Thanhniennews) SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION Mergers and Acquisitions: Doing The Deal Start with an Offer When the CEO and top managers of a company decide that they want to do a merger or acquisition, they start with a tender offer. The process typically begins with the acquiring company carefully and discreetly buying up shares in the target company, or building a position. Once the acquiring company starts to purchase shares in the open market, it is restricted to buying 5% of the total outstanding shares before it must file with the SEC. In the filing, the company must formally declare how many shares it owns and whether it intends to buy the company or keep the shares purely as an investment. Working with financial advisors and investment bankers, the acquiring company will arrive at an overall price that it's willing to pay for its target in cash, shares or both. The tender offer is then frequently advertised in the business press, stating the offer price and the deadline by which the shareholders in the target company must accept (or reject) it. The Target's Response Once the tender offer has been made, the target company can do one of several things: Accept the Terms of the Offer - If the target firm's top managers and shareholders are happy with the terms of the transaction, they will go ahead with the deal. Attempt to Negotiate - The tender offer price may not be high enough for the target company's shareholders to accept, or the specific terms of the deal may not be attractive. In a merger, there may be much at stake for the management of the target - their jobs, in particular. If they're not satisfied

with the terms laid out in the tender offer, the target's management may try to work out more agreeable terms that let them keep their jobs or, even better, send them off with a nice, big compensation package. Not surprisingly, highly sought-after target companies that are the object of several bidders will have greater latitude for negotiation. Furthermore, managers have more negotiating power if they can show that they are crucial to the merger's future success. Execute a Poison Pill or Some Other Hostile Takeover Defense – A poison pill scheme can be triggered by a target company when a hostile suitor acquires a predetermined percentage of company stock. To execute its defense, the target company grants all shareholders except the acquiring company - options to buy additional stock at a dramatic discount. This dilutes the acquiring company's share and intercepts its control of the company. Find a White Knight - As an alternative, the target company's management may seek out a friendlier potential acquiring company, or white knight. If a white knight is found, it will offer an equal or higher price for the shares than the hostile bidder. Mergers and acquisitions can face scrutiny from regulatory bodies. For example, if the two biggest longdistance companies in the U.S., AT&T and Sprint, wanted to merge, the deal would require approval from the Federal Communications Commission (FCC). The FCC would probably regard a merger of the two giants as the creation of a monopoly or, at the very least, a threat to competition in the industry.

Closing the Deal Finally, once the target company agrees to the tender offer and regulatory requirements are met, the merger deal will be executed by means of some transaction. In a merger in which one company buys another, the acquiring company will pay for the target company's shares with cash, stock or both. A cash-for-stock transaction is fairly straightforward: target company shareholders receive a cash payment for each share purchased. This transaction is treated as a taxable sale of the shares of the target company. If the transaction is made with stock instead of cash, then it's not taxable. There is simply an exchange of share certificates. The desire to steer clear of the tax man explains why so many M&A deals are carried out as stock-forstock transactions. When a company is purchased with stock, new shares from the acquiring company's stock are issued directly to the target company's shareholders, or the new shares are sent to a broker who manages them for target company shareholders. The shareholders of the target company are only taxed when they sell their new shares. When the deal is closed, investors usually receive a new stock in their portfolios the acquiring company's expanded stock. Sometimes investors will get new stock identifying a new corporate entity that is created by the M&A deal.

(Source: ICE Collection)

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

Vietnam Investment Market German interest in Vietnam renewed

China’s Guangdong province expects double investment in Vietnam

Hanoi Times - Vietnam’s high economic growth rate has encouraged German enterprises, especially A senior Chinese party member has proposed those from the Federal State of Hessen, to show that the Vietnamese government further create more interest in trade and investment in Vietnam. favourable conditions for Guangdong province to double its investment in Vietnam to 5 billion USD This was the view of Klauss-Peter Guettler, head of a in the next three years. visiting German trade delegation, on September 8. Guettler who is Secretary of Hessen’s Ministry of Economy, The Secretary of the Guangdong Provincial Party Transportation and Development, was speaking to Committee, Wang Yang, is on a visit to Vietnam . He Chamber of Commerce and Industry vice chairman Doan made the proposal while he was received together with Duy Khuong. Guangdong businessmen by Prime Minister Nguyen Tan Dung in Ho Chi Minh City on September 10. At present, Germany is Vietnam’s largest European Union trading partner. In the past seven months of this year, PM Dung affirmed that Vietnam ’s government agencies Vietnam exported US$1.3 billion worth of goods to as well as localities have been always paying attention Germany. to and facilitating China ’s investment in the country. Key export items included footwear, textiles and garments, seafood, handicrafts, computers, coffee, tea and rice. Regarding important projects that Guangdong businesses want to invest in Vietnam , the PM said the By June this year, German businesses had pumped more two sides should discuss coordination to ensure that than US$599 million into 105 Vietnamese projects. This these projects will be implemented successfully for placed Germany 20th among 81 countries and territories stable, sustainable and practical cooperation. investing in Vietnam. The government leader agreed with his guest’s About 30 German firms attended a seminar in Hanoi on proposal to set up a regular dialogue mechanism September 8. They are involved in waste and waste-water between Guangdong and relevant Vietnamese agencies treatment, bicycles and bicycle parts, packing machines, air and localities to timely tackle obstacles and put forth conditioners for vehicles, bottle moulds and parts, metal useful measures for successful implementation of alloys, IT, finance and banking, trade consulting, garments and textiles and communications security systems. development cooperation programmes.

( Source: VOV)

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( Source: VNA)

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SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

Page 9

Short Investment News Over 11 trillion VND for 2009 agricultural investments The Ministry of Agriculture and Rural Development (MARD) reported that over 11 trillion VND in total is needed for investments in agricultural development for 2009. MARD said it plans to raise almost 4 trillion VND from domestic sources, over 3 trillion VND in foreign investments and another 4 trillion VND from the issuance of Government bonds. The money is scheduled to be invested in upgrading dyke systems and building dams and dykes against flooding as well as reservoirs to fight droughts in the Red river delta. Projects subject to the investment scheme are to help shift production structure and irrigation projects in service of aquaculture and salt production.

(Source: VNA)

Vietnam, Philippines pledge mutual investment incentives Vietnam and the Philippines will expand cooperation and continue to give each other more priorities regarding investment. President of the Ho Chi Minh City Union of Friendship Organisation Le Hung Quoc and Honorary Consul General Gerry T. Paglinawan reaffirmed the two countries’ resolve at a ceremony in HCM City on September 10 to mark the 110th anniversary of Philippine Independence Day and the 32nd anniversary of their diplomatic ties. Quoc said that the Plan of Action 2006-2010 to implement the Joint Statement on bilateral cooperation framework in the first 25 years of the 21st century and next period effectively helped strengthen trade and investment cooperation. In 2007, two-way trade turnover was nearly 2 billion USD. The Philippines is now one of Vietnam’s major rice importer and many Philippine investors wanted to do business in Vietnam. Honorary Consul General Gerry T. Paglinawan said that with an increasing number of Philippine businessmen and experts in Vietnam, the Philippine Businesses Association will be established and the Philippine community plans to boost cultural exchange with the Vietnamese people. On this occasion, the Bayanihan art troupe and the “Sound and Fire” band from the Philippines performed in HCM City.

(Source: VNA)

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE–Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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