Indonesian tycoon Tanoto offers to buy tissue maker Vinda for US$3.3 billion

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Indonesian magnate Sukanto Tanoto has offered to buy Vinda International Holdings in a deal valued at HK$26.1 billion (US$3.3 billion), to grow his pulp-and-paper empire spanning from China to Spain and Brazil.

Tanoto offered HK$23.50 per share for 92.3 per cent of the company that his family does not already control, according to a filing to the Hong Kong exchange on Friday. Vinda’s founder Li Chaowang and Swedish personal care product maker Essity, who have a combined 72.6 per cent stake, have pledged to accept the offer.

The offer price represents a 13.5 per cent premium to Vinda’s closing price on Thursday and is almost 150 per cent higher than its book value as at the end of June, according to the filing.

“This is a very attractive offer for Essity and for our shareholders,” Essity’s president and CEO Magnus Groth, said in a separate statement. “We maintain a presence in Asia and in Vinda through continued licensing of Essity’s brands, with sustainability requirements for sourcing, production and collaboration in innovation and marketing.”
Indonesian tycoon Sukanto Tanoto. Photo: Facebook/Sukanto Tanoto

Essity currently holds a 51.59 per cent stake in the company and its founder Li has a 21.04 per cent interest.

Tanoto intends to compulsorily acquire the rest of the shares if he can garner more than 90 per cent of Vinda in the takeover offer, and delist it from the Hong Kong stock exchange.

Vinda’s shares jumped 8.7 per cent to HK$22.50 on Friday, outpacing a 3.2 per cent gain in the Hang Seng Index. The stock has remained practically unchanged this year, compared with a 14 per cent slump in the benchmark.

Tanoto, 73, whose family migrated from China’s southeast Fujian province, built his business empire from scratch. He started out as a construction contractor to the oil industry and founded RGE in 1973, building it into his flagship enterprise. The closely held plywood maker now has operations in Indonesia, China, Brazil, Canada and Spain.

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Toilet roll in China printed with long list of English words on it

Toilet roll in China printed with long list of English words on it

Founded in 1985, Vinda has 13 production bases, with 10 in mainland China, and sells products under its namesake brand and others including Tempo and Tork, according to its website. Tissues accounted for 83 per cent of its sales last year, with the remainder coming from other products such as feminine and baby care.

Its shares have risen more than sixfold since the company began trading in Hong Kong in 2007, giving it a market cap of HK$27.2 billion.

The offer is pending approval by the Chinese government and is expected to be completed by mid-2024, Essity said in the statement.

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