Thai offer for F&N seen as boosting synergies in F&B sector

KUALA LUMPUR (Jan 25): AmResearch said it believed that the proposed takeover of Singapore-based Fraser and Neave Ltd (F&N) by Thailand’s Charoen Sirivadhanabhakdi could boost synergies between F&N and the companies of the Thai tycoon.

AmResearch said in a note on Friday that there was unlikely to be any change to F&N Holdings Bhd (F&N Malaysia) as it expects Thai Beverage pcl (ThaiBev) to transform into a huge regional player in terms of volume.

The research house is recommending a "hold" rating on F&N Malaysia, with an unchanged fair value of RM19.18 per share.

The proposed bid of a revised S$9.55 per share offer for F&N Singapore could raise Charoen's shareholding to 44.9% through a combination of shares from ThaiBev and TCC Asset Ltd, which are the largest shareholders of F&N Singapore.

Charoen needs another 5.1% of acquisition votes by Feb 4 for his offer to hit 50% and become unconditional. F&N Singapore, in return, will have a 56% stake in F&N Malaysia.

With the support of F&N Singapore’s cash pile of S$4.1 billion as at FY2012 from the recent sale of Asia Pacific Breweries, Charoen has opted to borrow funds for the remaining acquisition.

AmResearch predicts that Charoen would vote in favour of a distribution of a special dividend soon.

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