First Pacicif, Indofood deal at risk<\/p>\n
HONG KONG (Reuters): An attractive source of diversification
\ncould slip away from First Pacific Co Ltd if a deal to buy a
\nstake in Indonesia's PT Indofood Sukses Makmur fails to go
\nthrough, analysts said on Tuesday.<\/p>\n
The transaction was due to be completed on February 1 but
\nFirst Pacific said on Monday there were several unfulfilled
\nclosing conditions and other unresolved matters concerning
\nIndofood creditors.<\/p>\n
\"The unfulfilled conditions include obtaining certain third
\nparty consents and approvals, to the satisfaction of the parties
\nto the Stock Purchase Agreement,\" First Pacific said.<\/p>\n
\"If these issues are not resolved, the parties to the stock
\npurchase agreement may either waive the relevant conditions or
\nterminate the agreement,\" the company said in a statement.<\/p>\n
Indofood said last month the deal was awaiting approval from
\nits creditors.<\/p>\n
\"Of course, we would like to see the deal completed as soon as
\npossible,\" a First Pacific spokeswoman said on Tuesday.<\/p>\n
\"Currently, we do not have a timetable for that. Both parties
\nare still in discussions.\"<\/p>\n
The acquisition would involve the joint purchase by First
\nPacific and Nissin Food Products Co of a 60 percent stake in
\nIndofood from the Salim family and associated investors.<\/p>\n
Indonesian conglomerate Salim Group said on Tuesday the
\ndecision on whether or not First Pacific went ahead with its
\nplanned purchase remained in First Pacific's hands.<\/p>\n
An aide to Salim's executive director Benny Santoso said the
\nmatter was the concern of First Pacific, since the Hong Kong firm
\nhad suggested it, not Salim group.<\/p>\n
\"This is their concern. In this case Salim has no comment,\"
\nthe aide told Reuters after consulting with Benny.<\/p>\n
Salim Group controls both First Pacific and Indofood.<\/p>\n
Analysts said if the deal failed to go through, it would have
\na negative impact on First Pacific's long-term earnings prospects
\nand its share price, which was already reflecting an acquisition.<\/p>\n
\"It will provide a long-term earnings growth story,\" said
\nLachlan Christie, an analyst at South China Research.<\/p>\n
\"If First Pacific does not have something like Indofood, then
\nit does not have any long term prospects.\"<\/p>\n
Chiu Man Wai, an analyst at BNP Prime Peregrine, said the deal
\nwas just being delayed and First Pacific still had plenty of time
\nto complete the acquisition.<\/p>\n
\"The Indofood deal is a good deal because the price tag is
\ninexpensive and Indofood itself is generating positive cash
\nflow,\" Chiu added.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/first-pacicif-indofood-deal-at-risk-1447893297",
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