Food major Kido’s shareholders reject sale of 24% stake in Kido Foods

Shareholders of leading Vietnamese food and cooking oil producer Kido Group (KDC) have voted against the proposed sale of more than 24% of the company’s ownership in its subsidiary Kido Foods, as well as the transfer of the Celano, Merino, and KIDO trademarks.

The decision came after a detailed discussion during the company’s Extraordinary General Meeting of Shareholders (EGM) in Ho Chi Minh City on Friday.

According to chairman Tran Kim Thanh, under the board of directors' resolution dated January 17, 2023, the board decided to reduce its stake in Kido Foods from 73% to 49%, marking the shift of Kido Foods from a subsidiary to an affiliate.

The board brought this decision to shareholders for consideration, as the Law on Enterprises and the company’s charter do not clearly specify such an issue, he said.

Emphasizing the critical role that strong brands play in a company’s success, Thanh urged shareholders to consider the long-term impact of managing and utilizing the company’s brands effectively.

At the meeting, Star Pacifica Pte. Ltd., a foreign shareholder holding over 20 million KDC shares, expressed its concern regarding Kido Group’s sale of a 24% stake in Kido Foods.

While acknowledging that the share transfer fell within the board’s authority, as a major investor for the past five years, it voiced strong opposition to the transaction due to its potential negative impact on shareholder interests.

A representative from Star Pacifica said it does not agree with the transaction as it believes that Kido Group is best positioned to lead the ice cream industry. The shareholder asked the board to take action to protect shareholder interests.

Following the vote, 89% of shareholders agreed not to approve the sale. Shareholders also granted the board authority to finalize any related agreements, including contracts and amendments concerning the deal.

Earlier, Kido Group had successfully completed the sale of a 24% stake in Kido Foods, for nearly VND1.07 trillion ($42.66 million). Following the deal, Kido Foods is no longer a subsidiary of Kido Group, but has transitioned into an affiliate company.

In a related development, Nutifood Nutrition Foods JSC announced in September 2024 that it had completed necessary procedures to own 51% of Kido Foods' shares.

In addition to the share transfer issue, shareholders decided to retain ownership of the Celanoand Merino trademarks (along with 34 other related trademarks and brands) and Kido trademark for Kido Group.

Adding to the drama, on January 17, 2024, the People's Court of Ho Chi Minh City issued an emergency injunction barring Kido Foods and Dat Viet Media from using or promoting the Celano trademark.

This ruling came after Kido Group filed a request, prohibiting both companies from showcasing the trademark in certain television shows and on their social media platforms.

Kido, listed on the Ho Chi Minh City (HoSE) as KDC, closed Friday at VND58,700 ($2.3) per share.