- According to a
joint statement on the Singapore Stock Exchange, Oversea-Chinese Banking
Corporation Ltd (OCBC) and Great Eastern Holdings Ltd (GE) announced that they have
been approached by TCC Group to sell their combined 18.2% stake in Fraser &
Neave Ltd (F&NL) and 7.92% stake in Asia Pacific Breweries Ltd (APB).
- F&NL is the
parent company of Fraser & Neave Holdings (F&NH) with a 56.3% equity
stake. TCC Group (TCC) is a conglomerate
with various interests ranging from insurance to property development. TCC also
owns Thai Beverage Pcl –Thailand’s biggest beer and whisky producer.
- Based on last
closing prices, the combined stakes owned by OCBC and GE in F&NL and APB
are valued at circa SGD2.1bil and SGD756.6mil, respectively.
- Though still in the
preliminary stage, it is worth noting that the potential change in the shareholding
structure could trigger a battle for control at both F&NL and APB. Kirin Holdings
Co is F&NL’s largest shareholder with a 14.97% stake. Over at APB, Heineken
NV and F&NL own 42% and 40% of the group, respectively.
- Despite this, we
reckon this development is unlikely to have a significant impact on operations
at F&NH, at least for the medium term. F&NH is the dominant contributor
to the parent company’s revenue at 59%, while its property development arm
accounts for 38% and publishing & printing operations at 3%.
- As it is, note that
F&NH’s long-term strategies have been underscored by its aim to become a
stronger F&B player in the region. Dairies operations which make up the
bulk of the group’s earnings are poised for a full recovery, following
re-commencement of operations after the flooding in Bangkok.
- We maintain our
Hold rating on F&N for now, with an unchanged DCF-based fair value of RM18.10/share,
pending upcoming quarterly results.
Source: AmeSecurities
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