Panicking over Possibility of BJC’s Capital Increase to Fund for Investment in Tesco

The share price of Berli Jucker Public Company Limited (BJC) plunged ฿1.00/share or 2.33% to close at ฿42.00/share yesterday after the report from the executives on joining the bidding for Tesco Lotus.

 

BJC’s President Aswin Techajareonvikul stated the company’s intention of participating in the bidding for the operation of Tesco Lotus in Thailand.

 

However, some investors were worried about the possibility of a capital increase to fund for the Tesco investment. Meanwhile, Maybank Kim Eng stated that the acquisition with an estimated value of 300,000 million baht for the acquisition of Tesco Lotus in Thailand would significantly increase its retail stores from 1,379 to 3,346 branches nationwide. BJC would gain higher bargaining power with suppliers as well as a synergy between two businesses due to their similarity in business operation.

Tesco Lotus in Thailand reported its financial statement (1 March 2018 – 28 February 2019) with revenue at 188,328 million baht, and a net profit at 7,820 million baht.