KIDO shareholders oppose the sale of shares in the ice cream company that would generate trillions of dong.

Some shareholders and representatives of foreign investment funds disagreed with KIDO's divestment from its subsidiary, indirectly leading to the dispute over the Celano and Merino ice cream trademarks.

The origin of the Celano and Merino ice cream trademark dispute.

On the morning of January 24th, KIDO Group Joint Stock Company (KIDO; HoSE: KDC) held its 2024 extraordinary general meeting of shareholders.

At the general meeting, in addition to a preliminary report on the business performance over the past year, KIDO sought shareholder approval for the sale of shares in KIDO Frozen Foods Joint Stock Company (KDF) and the protection of the Celano and Merino ice cream brands.

Regarding the sale of shares in KDF, in 2023, KIDO sold 24.03%, reducing its ownership stake from 73% to 49%. This transaction brought KIDO VND 1,069 billion, and KDF transformed from a subsidiary into an associate company of the group.

By September 2024, Nutifood announced that it had completed the acquisition of 51% of the shares, becoming the controlling entity of KDF.

Protecting the Celano and Merino ice cream trademarks is one of the important issues KIDO is seeking shareholder approval for. Photo: Anh Phuong

Regarding KDF, this business was formed in 2003 after KIDO acquired the Wall's ice cream brand. Between 2004 and 2005, KDF successively launched two ice cream brands, Celano and Merino. These were KDF's two flagship products until the company was sold.

In June 2022, KDF signed a contract to transfer the Celano ice cream brand and more than 30 other brands owned by the company to KIDO. At the end of 2023, KDF continued to transfer the Merino ice cream brand to KIDO.

However, recently, KDF has been promoting the Celano ice cream brand without KIDO's consent. This includes advertising Celano ice cream in music and entertainment programs such as "Anh Trai Say Hi" and "2 Days 1 Night," produced by Dat Viet Media Joint Stock Company.

Therefore, KIDO filed a lawsuit against KDF. Recently, the Ho Chi Minh City People's Court issued a decision applying an urgent interim measure, prohibiting KDF and Dat Viet Media from advertising, promoting, or introducing the Celano ice cream brand.

Shareholders oppose the trillion-dollar deal.

Regarding the sale of over 24% of KDF shares, KIDO's supervisory board stated that this is a significant transaction and that KDF is using trademarks owned by the group, therefore it requires shareholder review and feedback.

Speaking to shareholders, Mr. Tran Kim Thanh - Chairman of the Board of Directors of KIDO - said that in M&A transactions, there is a difference between buying a business and buying a brand. When KDF transitioned from a subsidiary to an associate company of the group, ambiguity arose in the ownership of the brands.

Mr. Tran Kim Thanh - Chairman of the Board of Directors of KIDO. Photo: Anh Phuong

At the general meeting, a representative from Star Pacifica Investment Fund (Singapore), which owns 7.1% of KIDO shares (equivalent to VND 1,120 billion), stated that the decision to sell over 24% of KDF shares falls under the authority of KIDO's Board of Directors. However, this representative disagreed with the transaction because it has been and continues to affect the interests of many shareholders, including Star Pacifica.

"I believe KIDO will operate the ice cream business more efficiently than any other company to generate profits for shareholders. I propose that the Board of Directors develop a plan to handle this transaction to ensure the interests of shareholders," said a representative of the Star Pacifica investment fund.

Sharing the same view, a representative of Vina QSR Limited, an investment fund that owns 2.6 million KIDO shares, said that before investing in the group, the fund had confidence in how KIDO operated its various product lines, with its two ice cream brands, Celano and Merino, leading the market.

With KIDO selling its KDF shares without consulting shareholders, a representative from Vina QSR Limited argued that the fund's interests and those of its shareholders were being negatively impacted. This representative disagreed with the transaction and requested that KIDO's Board of Directors and shareholders hold a public vote on the matter.

During the voting session, over 89% of shareholders attending the meeting did not approve the sale of more than 24% of KDF shares. At the same time, shareholders approved retaining ownership in KDF to protect the brand value, the right to use, or authorize third parties and subsidiaries to use.

In addition, KIDO shareholders also approved the authorization for the Board of Directors and the General Director to decide on specific terms and sign and execute related transactions, contracts, agreements, and documents concerning the Celano and Merino trademark transactions.

Why were 'Brother Says Hi' and '2 Days 1 Night' banned from advertising Celano ice cream?

Regarding the Celano trademark dispute lawsuit, the court has just issued a decision prohibiting KIDO Foods and Dat Viet Media from advertising this ice cream brand.

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Source: https://vietnamnet.vn/co-dong-kido-phan-doi-thuong-vu-ban-co-phan-cong-ty-kem-thu-nghin-ty-2366294.html