Indonesia’s PT Indofood to buy rest of China Minzhong Food for $383 mn

PT Indofood Sukses Makmur, the food unit of First Pacific Co Ltd, controlled by Indonesian billionaire Anthoni Salim's investment company, today offered S$488 million ($383 million) in cash for the rest of vegetable processor China Minzhong Food Corp, that it does not already own.

Indofood, which has built up a 33.49 per cent stake in Minzhong Food, has offered to pay $1.12 a share, valuing the company at around S$734 million ($575 million).

Indofood yesterday bought 25.59 million shares or 3.9 per cent of Minzhong from the market, taking its holding in the Singapore-listed company to 33.49 per cent, kicking off a mandatory offer for the remaining shares.

The move comes after California-based Glaucus Research released a report on fraudulent accounting practices at Minzhong, which saw the Fujian-based vegetable processor's value plunging by nearly half last week to $273 million.

Minzhong issued a statement denying all allegations and said it had not fabricated its sales or accounts. It added that it had conducted a review of Glaucus report and rejected its reckless opinions.

"We reiterate that most of the issues raised by Glaucus with regard to the financials of the company arose out of a complete lack of understanding of the way we conduct our business as well as the operating environment in the People's Republic of China," it said.

Founded in 1971, Minzhong is a leading integrated vegetable processor in China with its own diversified cultivation bases and a network of vegetable suppliers.

It sells fresh vegetables domestically and offers more than 100 types of processed vegetables that are processed using methods such as air drying, freeze-drying, fresh-packing and brining.

Its products are distributed across four continents spanning 26 different countries and regions including the Americas, Asia and Europe.

Jakarta-based Indofood and listed on the Indonesian Stock Exchange, Indofood calls itself as a Total Food Solutions company with operations in all stages of food manufacturing from the production of raw materials and their processing through to consumer products in the market.

It is one of the leading packaged food producers in Indonesia, with a wide range of packaged food products and owns Indonesia's largest flour mill.