ThaiBev proposes share swaps involving F&N, Frasers Property to become pure F&B player
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Thai Beverage, which owns the Chang beer brand, closed at 50 cents on July 17, before trading of its shares were halted on July 18.
PHOTO: THAIBEV
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SINGAPORE - Beverage maker Thai Beverage (ThaiBev) wants to streamline its stakes in F&N and Frasers Property in a move that it said will help it become one of South-east Asia’s largest food and beverage (F&B) companies.
It will also enable the market to more accurately value the company’s business in line with its peers.
ThaiBev, which is a component stock on Singapore’s Straits Times Index (STI), on July 18 proposed a share swap between its subsidiary, InterBev Investment, and TCC Assets, an investment holding company controlled by Mr Charoen Sirivadhanabhakdi.
The Thai tycoon also controls ThaiBev.
The proposed share swap will involve InterBev transferring its 28.78 per cent stake in Frasers Property to TCC Assets, and TCC Assets transferring its 41.3 per cent stake in F&N to InterBev.
The move will result in ThaiBev ceasing to hold any interest in Frasers Property, and see its total stake in F&N through InterBev increase from the existing 28.31 per cent to 69.61 per cent.
TCC Assets will also see its stake in F&N decrease from the existing 58.9 per cent to 17.6 per cent, while its stake in Frasers Property will increase from the existing 58.1 per cent to 86.89 per cent.
ThaiBev, which is run by Mr Charoen’s son Thapana, said that by exiting the property business, the company can focus on becoming a “stable and sustainable” Asean F&B player.
The move will also enable it to expand into the non-alcoholic beverages and dairy businesses through F&N, helping to enhance revenue and cost savings.
ThaiBev, which is Thailand’s largest whisky maker and owns the Chang beer brand, will also be able to take better advantage of F&N’s reach in the region, particularly in Singapore and Malaysia.
F&N’s brands include the 100 Plus isotonic drink, Seasons teas, Magnolia milk and F&N soft drinks like Sarsi and Ice Cream Soda.
Mr Charoen, through ThaiBev and TCC Assets, first bought a controlling stake in F&N in 2013 for US$11.2 billion, beating a rival offer by Indonesian tycoon Stephen Riady.
Frasers Property, which had been the wholly owned property arm of F&N at the time, was then separately listed on the Singapore Exchange in 2014.
However, both F&N and Frasers Property have not traded well since, and “the company is of the view that the low trading liquidity and current market prices of both companies do not appropriately reflect the fair values of each business”, ThaiBev said in its filings with the bourse.
Based on their 12-month average daily trading volume, the trading liquidity of F&N and Frasers Property is over 90 per cent lower than that of other STI constituents, and both stocks have “historically traded at significant discounts to their respective net asset values”, ThaiBev said.
The proposed share swap will be executed at a ratio of approximately 1.88 Frasers Property shares for each F&N share.
This ratio was determined based on a negotiated price of $1.89 per Frasers Property share and $3.55 per F&N share.
Shares of F&N closed at $1.30 on July 18, after rising more than 21 per cent following the announcement, while Frasers Property shares closed at 82 cents, up 2.5 per cent.
F&N’s valuation was based on its Vietnam dairy business and Malaysia F&B business, which are both listed, and remaining unlisted F&B businesses. It also includes Times Publishing, which is F&N’s legacy publishing business.
There will be no cash involved in the proposed transaction, which requires shareholders’ approval to proceed.
An extraordinary general meeting (EGM) will be convened in Thailand for this purpose, with parties involved aiming to complete a share swap by Sept 30.
Under Thai law, Thailand-incorporated companies are required to hold their general meetings in the country.
The company will hold a Singapore dialogue with its management for shareholders based here ahead of the EGM.
ThaiBev said it has also received a ruling from the Securities Industry Council of Singapore that InterBev will not be required to make a general offer for F&N under the Singapore Code on Take-overs and Mergers in connection with the share swap.
ThaiBev shares were at 50 cents at the close of the market on July 18.
