Last month, Vietnam announced its biggest-ever and long-delayed state sale of Sabeco, or Saigon Beer Alcohol Beverage Corp and said it was open to selling a stake of nearly 54 percent, but retained a cap of 49 percent on foreign ownership.

The people had said that Thai Bev, controlled by tycoon Charoen Sirivadhanabhakdi, was shaping up as a strong contender, as it was familiar with the Vietnam system and saw Sabeco as key to expanding outside its home market. initial price of 320,000 VND per stake, Thai Beverage is expected to shell out at least 51.3 trillion VND, equivalent to 2.3 billion USD for 25% shares of Sabeco. 

Sabeco’s shares jumped by the daily limit of 7 percent in early trade to stand at 313,000 dong($13.8). The shares have nearly trebled since listing a year ago, with analysts citing a small float as inflating its market value.

The Sabeco auction is on Dec. 18, and bidders keen to own a stake of 25 percent or more of Sabeco’s shares need to inform local authorities a week ahead. Sabeco’s foreign ownership cap limits overseas bidders to a minority stake of up to 39 percent, as foreign entities already own 10 percent.

Vietnam Beverage Company Ltd is owned by Vietnam F&B Alliance Investment Company, which is in turn 49-percent owned by BeerCo Ltd, an indirect wholly-owned subsidiary of Thai Beverage, official documents on the companies showed. Thai Beverage had no immediate comment and shares in the Singapore-listed company were halted for trading pending an announcement.

Lack of control, the unorthodox manner of the sale of the Sabeco stake and sky-high valuations could put off some possible bidders, bankers, investors and lawyers said. It was not immediately clear if other potential bidders for Sabeco had decided to bid for stakes of less than 25 percent or if they would sit out the auction.

Vietnam’s trade ministry, which represents state shares in Sabeco, has said foreign investors can link up with Vietnamese firms to buy shares in Sabeco, but have to comply with local laws and regulations. The divestment of Sabeco and Habeco, the two biggest local brewers in Viet Nam, has attracted significant attention in the market. MoIT holds 89.59 per cent of Sabeco’s charter capital and is expected to sell 53.59 per cent. In Habeco, the ministry plans to offload its entire holding of 81.79 per cent. Sabeco is the leading beer producer in terms of market share, holding 40 per cent of local beer consumption. Heineken came second, with a 25 per cent market share, followed by Habeco, with 18 per cent.