Financial adviser opposes BJC's plan
JayDee Partners, as the independent financial adviser to Berli Jucker, has recommended that BJC's shareholders reject the company's proposal to acquire Metro Cash & Carry Vietnam on the grounds that the additional conditions are different from the conditi
The supplemental deed to the agreement has added key additional conditions relating to the payment of the purchase price that may cause BJC to incur risks and negative effects both financial and legal due to risks concerning the loan financing and the transfer to Metro Vietnam’s capital account in advance for the whole amount of 655 million euros (Bt25.8 billion), the adviser said.
The payment would be made despite the uncertainty on obtaining the amended investment certificate and/or the uncertainty on receiving the money back in case the agreement between the counterparties is terminated.
The total amount required for entering the transaction is 1.31 billion euros. BJC is facing a risk in obtaining additional loan financing.
As for the litigation risk, according to BJC’s legal adviser, if the company’s shareholders approve the transaction but BJC is unable to obtain ample financing to enter the transaction, BJC is exposed to high litigation risks resulting from the inability to perform its duty according to the sale and purchase agreement.
Therefore, the independent financial adviser took the view that the purchase of the total charter capital of Metro Vietnam under the new conditions was inappropriate and might impose significant risks to the company’s financial position.
The adviser is recommending that the shareholders withhold their approval for the transaction.
The Stock Exchange of Thailand recommends that BJC’s shareholders carefully scrutinise the report of the independent financial adviser and attend an extraordinary shareholders meeting tomorrow.
