Thai Beverage Public Company Limited - Why did it not take F&N private?

RELATED QUOTES

SymbolPriceChange
Y92.SI0.95-0.01

2/5/2013 – The owners of Fraser & Neave (F&N), TCC Assets and Thai Beverage, have announced that they will keep F&N listed.

The market was expecting Thai billionaire Charoen Sirivadhanabhakdi to delist F&N as it holds 90.3% of the firm through TCC Assets and Thai Beverage.

In January, Charoen won a two month battle against a group led by Overseas Union Enterprise after raising his bid for the F&N shares he did not own to S$9.55 per share.

Under Singapore Exchange listing rules, the free float of a company must be at least 10% for it to remain listed.

The Thai firms’ decision to maintain F&N’s listing may sell shares in a placement, or a part sale, to meet this requirement.

CIMB Research maintained its OUTPERFORM rating with a target price of S$0.77 as it does not think that this is the end of F&N’s restructuring or Thai Bev’s regional consumer strategy.

It still expects F&N to be broken up eventually into its property and consumer parts.

Investor Central. Asian insights for global investors. We ask the tough questions of Asian companies which global investors need answers to.

Question 1. Why did it not take F&N private?

Restoring the free float to 10% simply entails a sell down of 0.4% or a placement of some new F&N shares.

That is not difficult.

The question is why.

With Thai Beverage ostensibly interested in only the food & beverage assets and TCC Assets clearly more interested in the property assets, it would be easier to split up the conglomerate by taking F&N private.

CIMB Research thinks TCC needs F&N to stay listed for its stake in F&N to be better recognised as bank collateral.

A second reason could be the group wants to keep F&N listed for the purpose of brand value.

Question 2. Is F&N being prepared for a reverse take-over?

F&N’s assets could be moved under any one of Charoen’s umbrella companies, leaving an empty shell.

These are attractive to companies that want to list without issuing a prospectus, for example, Wilmar International listed by a reverse take-over of Ezyhealth Asia Pacific.

Perhaps Charoen already has a buyer in mind?

Perhaps he plans a reverse take-over himself, achieving an SGX-listing for one of his other businesses?

Question 3. Is a restructure inevitable?

One possibility is that Thai Beverage could end up as a holding company for three non-alcoholic consumer businesses, with Thai Beverage and TCC ending up sharing ownership of a mixed consumer-property vehicle.

CIMB Research thinks that this is unlikely as the way Chaoren has structured his empire in the past is to have single-type businesses and pave the way for each part of his empire to be run by each of his children.

Indeed, if there is no further restructuring in future, the disconnected nature of three non-alcoholic consumer businesses and the shared ownership of F&N between Thai Beverage and TCC may lead to a 10% to 20% holding company discount.

This less likely scenario is most detrimental to its fair value of stock price.

Therefore, is it inevitable that the business will be restructured?

Perhaps the investment bankers are already devising ways that this could be done.

Question 4. How does Thai Beverage plan to cut its debt following the recent S&P downgrade?

S&P recently downgraded Thai Bev’s debt rating from BBB to BBB-, citing higher debt and lower cash flow as the reasons for a weaker financial risk profile.

This downgrade by S&P is understandable as interest cover has fallen after the F&N acquisition.

While the F&N acquisition have strained the balance sheet, CIMB Research argues that Thai Bev is laying the groundwork for dominance of the beverage sector in Singapore, Malaysia and Thailand.

This makes the business more valuable in spite of balance sheet strains.

On the flip side, Thai Beverage can swap its 29% stake in F&N for cash plus F&N’s business with TCC.

If that happens, CIMB Research estimates net proceeds of S$1.2 bln could be used to pay down debt, reducing net gearing from 1.2 times to 0.8 times.

We have sent these questions to the company to invite them for an on-camera interview, and/or seek their written response.

Sofar, we have not had a reply (which is why you are seeing this message).



©2013 Investor Central® - a service of Hong Bao Media

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • German air force inspecting 10 A400M engines on EASA orders - Die Welt Reuters - 1 hour 26 minutes ago

    BERLIN (Reuters) - The German air force is inspecting 10 engines from Airbus A400M military transport planes under orders from European safety officials after cracks were discovered in the combustion chamber ... … More »

  • J.C. Penney to close 13 to 14 percent of stores Associated Press - 1 hour 28 minutes ago

    J.C. Penney said Friday that it will be closing anywhere from 130 to 140 stores as well as two distribution centers over the next several months as it aims to improve profitability in the era of online ... … More »

  • PharMerica beats 4Q profit forecasts Associated Press - 1 hour 31 minutes ago

    The Louisville, Kentucky-based company said it had net income of 25 cents per share. Earnings, adjusted for one-time gains and costs, came to 58 cents per share. The results beat Wall Street expectations. ... … More »

  • BRIEF-Tdm says Jan fresh fruits bunches production 33,144.23 MT Reuters - 1 hour 32 minutes ago

    Feb 24 (Reuters) - Tdm Bhd * Jan fresh fruits bunches production 33,144.23 mt, crude palm oil production 5,849.54 mt, palm kernel production 1,597.45 mt Source ( http://bit.ly/2lzDSOU ) Further company ... … More »

  • Ellen, Wal-Mart give scholarships to school's senior class
    Ellen, Wal-Mart give scholarships to school's senior class Associated Press - 1 hour 35 minutes ago

    Ellen DeGeneres has handed out college scholarships to the entire senior class of a New York City charter school. DeGeneres surprised the 41 students from Brooklyn's Summit Academy this week at her California ... … More »

  • China, France overtake US as top German trade partners
    China, France overtake US as top German trade partners Associated Press - 1 hour 40 minutes ago

    New statistics show that China and France have overtaken the U.S. as Germany's largest trading partners. Germany's Federal Statistical Office reported Friday that trade between the country and China in ... … More »

  • Bitcoin is hovering near all-time highs
    Bitcoin is hovering near all-time highs Business Insider - 1 hour 44 minutes ago

    Reuters/Bobby Yip Bitcoin on Friday pulled back slightly … Continued The post Bitcoin is hovering near all-time highs appeared first on Business Insider. … More »

  • Gold hits 3-1/2-month high as 'Trumpflation trade' fades
    Gold hits 3-1/2-month high as 'Trumpflation trade' fades Reuters - 1 hour 45 minutes ago

    Gold hit its highest in about 3-1/2 months on Friday as the dollar headed for its first week of decline in three after the new U.S. finance chief poured cold water on the "Trumpflation trade" that had boosted the greenback this year. Treasury … More »

  • Telkom Said to Mull Purchase of Cell C Debt in Ownership Bid (1) Bloomberg - 1 hour 45 minutes ago

    Cell C creditors approached Telkom to help reorganize debt that includes 640 million euros ($677 million) of bonds maturing in July 2018, said the people, who asked not to be identified because discussions are private. Telkom, whose attempts to … More »

  • BASF's fourth-quarter operating profit boosted by higher petrochemical prices Reuters - 1 hour 47 minutes ago

    Germany's BASF (BASFn.DE), the world's largest chemicals group by sales, forecast a rebound in earnings this year after higher petrochemical prices boosted profits in the final three months of 2016. The company, whose products include catalytic … More »

  • Bundesbank official warns London banks against post-Brexit tricks
    Bundesbank official warns London banks against post-Brexit tricks Reuters - 1 hour 51 minutes ago

    UK-based banks that want to operate across the European Union after Brexit must set up genuine operations, not 'empty shells' in EU countries, a Bundesbank official said on Friday. Andreas Dombret, the Bundesbank board member responsible for … More »

  • J.C. Penney to Shut as Many as 140 Stores as Industry Slumps (1) Bloomberg - 1 hour 52 minutes ago

    The closings represent as much as 14 percent of the company’s store base and less than 5 percent of total sales, J.C. Penney said Friday. J.C. Penney’s plan echoes rival Macy’s Inc.’s announcement last year that it would shut about 100 of its … More »

  • Standard Chartered shares fall as it withholds dividend but lifts bonuses Reuters - 1 hour 53 minutes ago

    LONDON/HONG KONG (Reuters) - Standard Chartered (STAN.L) shares fell as much as 5 percent on Friday as the British bank said it would not pay a dividend for 2016 due to restructuring costs, but increased its staff bonus pool by 5 percent. The bonus … More »

  • BRIEF-Borneo Oil bhd updates on January production Reuters - 1 hour 57 minutes ago

    Feb 24 (Reuters) - Borneo Oil Bhd: * Jan ores mined 48,936.80 mt , Jan production of gold dore 72.54 oz Source text: Further company coverage: … More »

  • PSEG reports 4Q loss Associated Press - 1 hour 57 minutes ago

    On a per-share basis, the Newark, New Jersey-based company said it had a loss of 19 cents. Earnings, adjusted for non-recurring costs, came to 54 cents per share. The results surpassed Wall Street expectations. ... … More »

  • Harsco reports 4Q loss Associated Press - 2 hours 3 minutes ago

    On a per-share basis, the Camp Hill, Pennsylvania-based company said it had a loss of 19 cents. Earnings, adjusted for one-time gains and costs, came to 16 cents per share. The industrial services company ... … More »

  • E.W. Scripps beats Street 4Q forecasts Associated Press - 2 hours 3 minutes ago

    The Cincinnati-based company said it had profit of 46 cents per share. The results exceeded Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for ... … More »

  • Exit by Polish Top Brass Guts Command on NATO Front Line (2) Bloomberg - 2 hours 3 minutes ago

    With the government moving to rid institutions of officials appointed by the former ruling Civic Platform party, which it defeated in 2015 elections, 90 percent of the General Staff leadership and more than 80 percent of the army’s top brass have … More »

  • Portugal could exit excessive deficit in spring - EU's Dombrovskis Reuters - 2 hours 9 minutes ago

    Portugal is set to exit the EU excessive deficit procedure if the European Commission confirms its latest forecasts for this year and next in a new assessment in the spring, a top EU official said on Friday. Lisbon says it cut the budget deficit … More »

  • EHealth reports 4Q loss Associated Press - 2 hours 13 minutes ago

    On a per-share basis, the Mountain View, California-based company said it had a loss of 91 cents. Losses, adjusted for stock option expense and amortization costs, came to 79 cents per share. The results ... … More »

  • China overtakes US as Germany's top trade partner AFP - 2 hours 15 minutes ago

    China overtook the United States last year to become Germany's biggest trading partner for the first time, official data showed, a shift likely to reassure Berlin as worries grow over US President Donald ... … More »

  • Calgon reports 4Q loss Associated Press - 2 hours 27 minutes ago

    On a per-share basis, the Moon Township, Pennsylvania-based company said it had a loss of 12 cents. Earnings, adjusted for non-recurring costs, were 5 cents per share. The results fell short of Wall Street ... … More »

  • Global stocks fall amid Trump trade policy concerns
    Global stocks fall amid Trump trade policy concerns Associated Press - 2 hours 28 minutes ago

    Global stocks fell Friday amid worries about the potential impact of U.S. trade policies and as investors became more cautious about the market's recent rally. KEEPING SCORE: France's CAC 40 slumped 1.4 ... … More »

  • Will the legend of Nokia 3310 see its comeback?
    Will the legend of Nokia 3310 see its comeback? International Business Times - 2 hours 29 minutes ago

    Nokia 3310 is truly a legendary phone that deserves a revival from HMD Global. … More »

  • IStar reports 4Q loss Associated Press - 2 hours 29 minutes ago

    On a per-share basis, the New York-based company said it had a loss of 27 cents. Earnings, adjusted for one-time gains and costs, were 4 cents per share. The commercial real estate finance company posted ... … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.225-0.045-16.67%
    N21.SI
    0.135+0.004+3.05%
    41F.SI
    0.191-0.007-3.54%
    40F.SI
    0.180.00-2.70%
    40E.SI
    0.1060.0000.00%
    5WA.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.60+0.28+87.50%
    AWC.SI
    0.48+0.17+54.84%
    BCD.SI
    0.35+0.08+29.63%
    BQO.SI
    0.515+0.065+14.44%
    T55.SI
    0.155+0.019+13.97%
    BKZ.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.225-0.045-16.67%
    N21.SI
    0.215-0.040-15.69%
    AWI.SI
    0.138-0.017-10.97%
    1C0.SI
    0.11-0.01-9.84%
    BRR.SI
    0.575-0.055-8.73%
    600.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.4049-0.0026-0.18%
    USDSGD=X
    1.4853-0.0036-0.24%
    EURSGD=X
    1.7580-0.0085-0.48%
    GBPSGD=X
    79.9990-0.063-0.08%
    SGDJPY=X
    5.5231+0.0123+0.22%
    SGDHKD=X
    3.1593-0.0033-0.10%
    SGDMYR=X
    9,486.1621-38.1729-0.40%
    SGDIDR=X
    4.8855+0.0077+0.16%
    SGDCNY=X
    1.0780-0.0075-0.69%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,253.70+2.30+0.18%
    GCJ17.CMX
    18.24+0.12+0.68%
    SIH17.CMX
    90.26+0.65+0.73%
    ^XAU
    2.67+0.01+0.28%
    HGK17.CMX
    54.00-0.45-0.83%
    CLJ17.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.83-0.05
    ^FVX
    2.35-0.04
    ^TNX
    2.99-0.04
    ^TYX