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621-640 of 1606
FRASER & NEAVE / THAI BEVERAGE
S$8.58-FNN SP / S$0.59-THBEV SP
Shareholders of Fraser and Neave (FNN) approved
the previously announced capital reduction exercise
of approximately S$4.7 billion during their
extraordinary general meeting on 28 June 2013.
Shareholders are expected to receive S$3.28 per
share at the closing of this exercise.
We believe that this would be positive for both
shareholders of FNN and its majority shareholder
Thai Beverage, in view that this exercise would unlock
value for shareholders of FNN and Thai Beverage. In
particular, this would bring significant improvement
to Thai Beverage’s balance sheet, as the capital
distribution exercise is expected to bring down its
net debt to equity ratio from 1.2X to 0.8X, given its
28.6% stake in FNN.
Separately, FNN also said that the company would
appoint advisers to study and review alternative
strategic options available to the Company, including
a possible segregation of its property-related
businesses from its non-property related businesses.
This would be very encouraging for both shareholders
at FNN and Thai Beverage as well. Specifically,
concerns surrounding Thai Beverage Pcl and TCC
Assets’ intentions to keep FNN listed and
corresponding worries about the lack of initiatives to
re-structure FNN to create synergies for the overall
group would be dissipated.
Currently, Thai Beverage trades at consensus FY14
P/E of 15.7X, representing a 12% discount to FNN’s
corresponding FY14 P/E multiple of 17.9X. Going
forward, we hold the conviction that Thai Beverage’s
valuation discount relative to FNN could potentially
narrow, in anticipation that we could see greater
synergies between FNN and Thai Beverage’s regional
businesses.
GorgeousOng ( Date: 28-Jun-2013 13:17) Posted:
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Peter_Pan ( Date: 28-Jun-2013 12:53) Posted:
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Peter_Pan ( Date: 25-Jun-2013 10:34) Posted:
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ongahhuat888 ( Date: 28-Jun-2013 11:48) Posted:
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GorgeousOng ( Date: 28-Jun-2013 09:24) Posted:
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GorgeousOng ( Date: 28-Jun-2013 09:12) Posted:
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