Fraser & Neave (F & N)

(25-10-2012, 08:03 AM)gwMoat Wrote: TCC Assets Ltd, a company linked to Thai billionaire Charoen Sirivadhanabhakdi, has extended the closing date of its $7.2 billion takeover offer for Fraser and Neave to Nov 8 from Oct 29. - Reuters

The offer price remains...

The party is still far from ending...

(25-10-2012, 11:21 AM)CityFarmer Wrote:

(25-10-2012, 08:03 AM)gwMoat Wrote: TCC Assets Ltd, a company linked to Thai billionaire Charoen Sirivadhanabhakdi, has extended the closing date of its $7.2 billion takeover offer for Fraser and Neave to Nov 8 from Oct 29. - Reuters

The offer price remains...

The party is still far from ending...

Seems like TCC is waiting to see who OUE is bringing to the party and with how much dough too. They're in pole position with regards their $8.88 offer being "low end of spectrum, but fair".

Sharp!

Worst outcome for them would be for their offer to lapse, anything else should be positive...me thinks.

(26-10-2012, 12:32 AM)gwMoat Wrote:

(25-10-2012, 11:21 AM)CityFarmer Wrote:

(25-10-2012, 08:03 AM)gwMoat Wrote: TCC Assets Ltd, a company linked to Thai billionaire Charoen Sirivadhanabhakdi, has extended the closing date of its $7.2 billion takeover offer for Fraser and Neave to Nov 8 from Oct 29. - Reuters

The offer price remains...

The party is still far from ending...

Seems like TCC is waiting to see who OUE is bringing to the party and with how much dough too. They're in pole position with regards their $8.88 offer being "low end of spectrum, but fair".

Sharp!

Worst outcome for them would be for their offer to lapse, anything else should be positive...me thinks.

TCC should not bidding against itself, with no official offer from others yet... IMO, the ultimate important now is to remain in the party till clearer visibility...

OUE is trying to do a 'Heineken'...

ie. OUE is interested to buy the Hospitality part of F&N. So, they're trying to send a message... Sell me that (after TCC is done with their G.O. process - unlikely to succeed but they'll be holding the largest stake in F&N) or else we'll spoil your party...

(26-10-2012, 10:46 AM)CityFarmer Wrote:

(26-10-2012, 12:32 AM)gwMoat Wrote:

(25-10-2012, 11:21 AM)CityFarmer Wrote:

(25-10-2012, 08:03 AM)gwMoat Wrote: TCC Assets Ltd, a company linked to Thai billionaire Charoen Sirivadhanabhakdi, has extended the closing date of its $7.2 billion takeover offer for Fraser and Neave to Nov 8 from Oct 29. - Reuters

The offer price remains...

The party is still far from ending...

Seems like TCC is waiting to see who OUE is bringing to the party and with how much dough too. They're in pole position with regards their $8.88 offer being "low end of spectrum, but fair".

Sharp!

Worst outcome for them would be for their offer to lapse, anything else should be positive...me thinks.

TCC should not bidding against itself, with no official offer from others yet... IMO, the ultimate important now is to remain in the party till clearer visibility...

If they allow their offer to lapse, they'll end up with no control an will be barred from bidding for a period right? So, they might just up their price...

Of course if OUE and co. come up with a better offer before the next closing date, they might just sell out and make a tidy profit, which they'd done with APB before.

But, if they really want F&N...then it'll be really interesting...my opinion only

The share price seems "normalizing" after the hype of counter offer subsided...
The share price has move down from a high of above $9.30 to $9.06, the closing price today.

Lets think through the potential scenarios abit more systematically.
In my humble opinion, there are 2 broad scenarios and 6 sub-scenarios.
The 2 broad scenarios are 1) OUE consortium bids; 2) OUE consortium does not bid
For 1) there are 2 sub-scenarios:
1.1) TCC counter bids, leading to a bidding war between TCC and OUE, and resulting price of FNN will be at 10.5-11.5 depending on how intense the bidding war becomes
1.2) TCC does not counter bid, and OUE consortium gets to tender FNN. Likely price will be the mid point of fair value range provided by independent study commissioned by FNN plus a small premium to appease shareholders. So around 10-10.5
For 2) there are 4 sub-scenarios
2.1) TCC increases tender price to sweeten offer and get more shareholders to tender. Likely new tender price will be 9-9.5 range
2.2) TCC keeps current offers and the tender succeed as is. Price will come down to 8.88 in the near term.
2.3) TCC keeps current offers and the tender fails, and TCC is legally barred from tendering for another year, and a new bidder (maybe Suntory or OUE return or another consortium) comes to bid at a slight premium to offer price of TCC. Likely price will be in the 9-9.5 range
2.4) TCC keeps current offers and the tender fails, and TCC is legally barred from tendering for another year, and no new bidder comes along. Price will come down to 8.88.
From the above scenarios, 2.2) would be the best for TCC but at the same time given the strategic importance of FNN to THBEV’s expansion plans, going for 2.2) would be very risky in the sense of 2.3) happening.
So if OUE does not bid then 2.1) is very likely if shareholders of FNN hang tough and do not tender in their shares – TCC will be forced to increase their tender offer price to get over the 50% mark.
If OUE bids then 1.1) is most likely given that FNN is of strategic importance to THBEV.
If you have studied the business history of LIPPO and TCC, you will know that both have made aggressive bids for companies. So what we are seeing now is a situation where 2 samurais are staring at each other – the calm before the battle.
From the news, TCC is increasing the number of bank partnerships on the condition that those banks do not lend to the takeover bid by OUE. This is a smart move given that equity raising is likely more painful than OUE and getting enough partners may not be easy.
Let’s continue to monitor what happens. In any case, the risk return of FNN is very attractive now. Upside of 10-20% vs downside of 3-4%.

in the scenario of 2.3), TCC can start to buy in the open market rather than lose anything. If I am not wrong, though TCC is legally barred from tender for another year, it is not barred from buying from the open market before reaching 50%.

so even in the case of 2.3), TCC is not losing anything big. for 9 - 9.5, if TCC wants to buy, they can still buy.

the chance of OUE is very slim without a huge premium to get >50% control. will OUE go all out for a not-so-sure buyout.

(30-10-2012, 08:44 PM)freedom Wrote: in the scenario of 2.3), TCC can start to buy in the open market rather than lose anything. If I am not wrong, though TCC is legally barred from tender for another year, it is not barred from buying from the open market before reaching 50%.

so even in the case of 2.3), TCC is not losing anything big. for 9 - 9.5, if TCC wants to buy, they can still buy.

the chance of OUE is very slim without a huge premium to get >50% control. will OUE go all out for a not-so-sure buyout.

Buying from market is not legally possible at this point if I m not mistaken

(30-10-2012, 09:01 PM)Thai_VI Wrote:

(30-10-2012, 08:44 PM)freedom Wrote: in the scenario of 2.3), TCC can start to buy in the open market rather than lose anything. If I am not wrong, though TCC is legally barred from tender for another year, it is not barred from buying from the open market before reaching 50%.

so even in the case of 2.3), TCC is not losing anything big. for 9 - 9.5, if TCC wants to buy, they can still buy.

the chance of OUE is very slim without a huge premium to get >50% control. will OUE go all out for a not-so-sure buyout.

Buying from market is not legally possible at this point if I m not mistaken

If i am not wrong, after WCY did a mandatory offer to UIC in 2009 and the offer lapsed, WCY did on market purchase.

maybe you can point which rule disallows on market purchase after a mandatory offer.