Fraser & Neave (F & N)

(31-10-2014, 03:36 PM)DP28 Wrote:

(31-10-2014, 02:46 PM)toiletsiao Wrote:

(31-10-2014, 01:10 PM)DP28 Wrote: Keep a lookout on UE too guys. Dont forget due diligence are due to conclude within days.

when did the ue due diligence process start? cant find any info it lei..

yup i saw it..but theres no indication of when it officially starts...if going by the date of the announcement...the 6weeks should end on ard 8th of October..

(31-10-2014, 09:50 AM)toiletsiao Wrote: I went to see ThaiBev's trading halt reason...

"We have been informed from our listed affiliate that it is going to make an announcement. In this connection, we consider that it might have an impact on our share price."

So i think it might not be what i initially thought..which was the share swap..now i am guessing that its the myanmar brewery arbitration results...

You are sharp. Latest update below. It means a lot to F&N...

(not vested)

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*DJ Myanma Economic Holdings: Wins Arbitration Against Fraser & Neave on Myanmar Brewery Stake

(MORE TO FOLLOW) Dow Jones Newswires

October 31, 2014 03:36 ET (07:36 GMT)
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http://infopub.sgx.com/FileOpen/MBL_Arbi...eID=321475

F&N Announces Arbitration Ruling Related to Myanmar Brewery Limited
Singapore, 31 October 2014 – Fraser and Neave, Limited (“F&N” or the “Group”) has today received the decision on its arbitration with Myanma Economic Holdings Limited (“MEHL”). F&N had announced on 29 August 2013 and 14 September 2013 MEHL’s intention to commence proceedings and subsequently, the receipt of notice of arbitration from MEHL.
MEHL was in the arbitration seeking to compel F&N to sell its 55% stake in Myanmar Brewery Limited (“MBL”) to MEHL at a price of US$246 million (approximately S$313 million).
The arbitral tribunal has today ruled that MEHL’s valuation of US$246 million does not represent a fair value of F&N’s stake in MBL, and that the sale should take place at a price to be determined by an independent valuer to be appointed by both parties, failing which by a valuer named by the tribunal. The tribunal also ordered each party to bear its own costs and expenses with regard to the arbitration. ”The Tribunal’s decision to set aside MEHL’s valuation and to order that a fresh valuation be done is a vindication of F&N’s position that the US$246 million at which MEHL wanted F&N to sell its shares to MEHL, which is only approximately 7.5 times the earnings of MBL1, was grossly inadequate and that F&N was correct in refusing to complete the sale at that price. F&N believed and continues to believe that MEHL’s price of US$246 million did not take into account, among other things, MBL’s leadership position in the Myanmar beer market, and at a time when MBL’s profit is growing at a phenomenal rate of nearly 50% over the last year,” said Mr Huang Hong Peng, Chief Executive Officer, Beer. F&N is presently reviewing the decision and all its options. In the meantime, F&N and its shareholder, Thai Beverage Plc Limited (“ThaiBev”) will study ways to enable it to maintain its presence in the Myanmar market, which still has great growth potential and remains of keen interest to the Group. “F&N ventured into Myanmar in 1995, at a time when many investors shied away from this country. We backed our belief in Myanmar and our partner with major investments, not only in assets but also in its people. Today, MBL is one of the largest, most profitable and highest tax-paying companies in Myanmar, with senior management consisting of Myanmar nationals whom
1Based on attributable profit for the trailing twelve-month period ending 30 June 2014
#20-00 Alexandra Point Tel : (65) 6318 9393
438 Alexandra Road Fax : (65) 6271 0811
Singapore 119958 Website: www.fraserandneave.com
Fraser and Neave, Limited
Page 2 of 2
F&N has groomed over the years. In addition, the Group has also taken an active role in the support of the local community through projects like Operation Smile, various vaccination and blood donation programs and scholarships.
We are disappointed that this dispute has arisen, at a time when Myanmar is opening its market, and is on the cusp of the introduction of international beer competitors,” said Mr Huang. More broadly, as part of the Group’s initiative to provide sharper focus on the food & beverage businesses, over the last 18 months, F&N Directors, together with the senior management team, undertook a strategic review of the businesses. The review was aimed at increasing the size and scale of the Group by leveraging strengths of ThaiBev and F&N. To achieve the objectives, the Directors have set out a 6-year roadmap, named Vision 2020, for the Group. Under the Vision 2020 roadmap, F&N will play an integral role in ThaiBev’s vision of becoming a stable and sustainable player in ASEAN countries. The roadmap centres on the Group building a solid platform for overseas expansion, focusing on Southeast Asia, via a two-pronged approach: - Strengthening market positions in Singapore, Malaysia and Thailand: Leveraging both F&N and ThaiBev’s distribution and bottling systems, one of the largest and most extensive in Southeast Asia, F&N aims to be leaders in these markets. - Overseas expansion: Using its operations in Singapore, Malaysia and Thailand as the platform, F&N intends to replicate its successful business models in other ASEAN countries, in particular Vietnam, Myanmar and Indonesia in the next three years. The Group aims to establish itself as a major food & beverage player in key markets outside of Singapore, Malaysia and Thailand. It shall continue to identify innovative approaches to existing and new partnerships that enable the Group to stay at the forefront of consumer trends in the food & beverage industry. “The goals of both F&N and ThaiBev are aligned, with great enhancement to F&N’s position as one of ASEAN countries’ leading F&B companies,” said Mr Huang.
- END -

(31-10-2014, 04:50 PM)CityFarmer Wrote:

(31-10-2014, 09:50 AM)toiletsiao Wrote: I went to see ThaiBev's trading halt reason...

"We have been informed from our listed affiliate that it is going to make an announcement. In this connection, we consider that it might have an impact on our share price."

So i think it might not be what i initially thought..which was the share swap..now i am guessing that its the myanmar brewery arbitration results...

You are sharp. Latest update below. It means a lot to F&N...

(not vested)

-----
*DJ Myanma Economic Holdings: Wins Arbitration Against Fraser & Neave on Myanmar Brewery Stake

(MORE TO FOLLOW) Dow Jones Newswires

October 31, 2014 03:36 ET (07:36 GMT)
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Forced to unlock value.... Lol

But a loss of a lucrative business

(31-10-2014, 06:30 PM)greengiraffe Wrote: http://infopub.sgx.com/FileOpen/MBL_Arbi...eID=321475

F&N Announces Arbitration Ruling Related to Myanmar Brewery Limited
Singapore, 31 October 2014 – Fraser and Neave, Limited (“F&N” or the “Group”) has today received the decision on its arbitration with Myanma Economic Holdings Limited (“MEHL”). F&N had announced on 29 August 2013 and 14 September 2013 MEHL’s intention to commence proceedings and subsequently, the receipt of notice of arbitration from MEHL.
MEHL was in the arbitration seeking to compel F&N to sell its 55% stake in Myanmar Brewery Limited (“MBL”) to MEHL at a price of US$246 million (approximately S$313 million).
The arbitral tribunal has today ruled that MEHL’s valuation of US$246 million does not represent a fair value of F&N’s stake in MBL, and that the sale should take place at a price to be determined by an independent valuer to be appointed by both parties, failing which by a valuer named by the tribunal. The tribunal also ordered each party to bear its own costs and expenses with regard to the arbitration. ”The Tribunal’s decision to set aside MEHL’s valuation and to order that a fresh valuation be done is a vindication of F&N’s position that the US$246 million at which MEHL wanted F&N to sell its shares to MEHL, which is only approximately 7.5 times the earnings of MBL1, was grossly inadequate and that F&N was correct in refusing to complete the sale at that price. F&N believed and continues to believe that MEHL’s price of US$246 million did not take into account, among other things, MBL’s leadership position in the Myanmar beer market, and at a time when MBL’s profit is growing at a phenomenal rate of nearly 50% over the last year,” said Mr Huang Hong Peng, Chief Executive Officer, Beer. F&N is presently reviewing the decision and all its options. In the meantime, F&N and its shareholder, Thai Beverage Plc Limited (“ThaiBev”) will study ways to enable it to maintain its presence in the Myanmar market, which still has great growth potential and remains of keen interest to the Group. “F&N ventured into Myanmar in 1995, at a time when many investors shied away from this country. We backed our belief in Myanmar and our partner with major investments, not only in assets but also in its people. Today, MBL is one of the largest, most profitable and highest tax-paying companies in Myanmar, with senior management consisting of Myanmar nationals whom
1Based on attributable profit for the trailing twelve-month period ending 30 June 2014
#20-00 Alexandra Point Tel : (65) 6318 9393
438 Alexandra Road Fax : (65) 6271 0811
Singapore 119958 Website: www.fraserandneave.com
Fraser and Neave, Limited
Page 2 of 2
F&N has groomed over the years. In addition, the Group has also taken an active role in the support of the local community through projects like Operation Smile, various vaccination and blood donation programs and scholarships.
We are disappointed that this dispute has arisen, at a time when Myanmar is opening its market, and is on the cusp of the introduction of international beer competitors,” said Mr Huang. More broadly, as part of the Group’s initiative to provide sharper focus on the food & beverage businesses, over the last 18 months, F&N Directors, together with the senior management team, undertook a strategic review of the businesses. The review was aimed at increasing the size and scale of the Group by leveraging strengths of ThaiBev and F&N. To achieve the objectives, the Directors have set out a 6-year roadmap, named Vision 2020, for the Group. Under the Vision 2020 roadmap, F&N will play an integral role in ThaiBev’s vision of becoming a stable and sustainable player in ASEAN countries. The roadmap centres on the Group building a solid platform for overseas expansion, focusing on Southeast Asia, via a two-pronged approach: - Strengthening market positions in Singapore, Malaysia and Thailand: Leveraging both F&N and ThaiBev’s distribution and bottling systems, one of the largest and most extensive in Southeast Asia, F&N aims to be leaders in these markets. - Overseas expansion: Using its operations in Singapore, Malaysia and Thailand as the platform, F&N intends to replicate its successful business models in other ASEAN countries, in particular Vietnam, Myanmar and Indonesia in the next three years. The Group aims to establish itself as a major food & beverage player in key markets outside of Singapore, Malaysia and Thailand. It shall continue to identify innovative approaches to existing and new partnerships that enable the Group to stay at the forefront of consumer trends in the food & beverage industry. “The goals of both F&N and ThaiBev are aligned, with great enhancement to F&N’s position as one of ASEAN countries’ leading F&B companies,” said Mr Huang.
- END -

(31-10-2014, 04:50 PM)CityFarmer Wrote:

(31-10-2014, 09:50 AM)toiletsiao Wrote: I went to see ThaiBev's trading halt reason...

"We have been informed from our listed affiliate that it is going to make an announcement. In this connection, we consider that it might have an impact on our share price."

So i think it might not be what i initially thought..which was the share swap..now i am guessing that its the myanmar brewery arbitration results...

You are sharp. Latest update below. It means a lot to F&N...

(not vested)

-----
*DJ Myanma Economic Holdings: Wins Arbitration Against Fraser & Neave on Myanmar Brewery Stake

(MORE TO FOLLOW) Dow Jones Newswires

October 31, 2014 03:36 ET (07:36 GMT)
----

Mr. Market has considered it as major setback for the company...

(not vested)

Fraser & Neave declines after Myanmar ruling

SINGAPORE -- Fraser & Neave fell the most in seven months in Singapore trading after a tribunal ruled that its Myanmar partner has the right to buy its stake in a joint-venture brewery, the Bloomberg news agency reported.

F& N tumbled as much as 5.4 per cent, the biggest intraday drop since March 24, before closing the day down 4.8 per cent lower at S$3 today (Nov 3). The stock resumed trading today after being suspended on Oct 31 pending the ruling.
...
http://www.todayonline.com/business/fras...mar-ruling

Lesson here - Myanmar is not as easy and lucrative as many imagine it could be...

(03-11-2014, 08:59 PM)CityFarmer Wrote: Mr. Market has considered it as major setback for the company...

(not vested)

Fraser & Neave declines after Myanmar ruling

SINGAPORE -- Fraser & Neave fell the most in seven months in Singapore trading after a tribunal ruled that its Myanmar partner has the right to buy its stake in a joint-venture brewery, the Bloomberg news agency reported.

F& N tumbled as much as 5.4 per cent, the biggest intraday drop since March 24, before closing the day down 4.8 per cent lower at S$3 today (Nov 3). The stock resumed trading today after being suspended on Oct 31 pending the ruling.
...
http://www.todayonline.com/business/fras...mar-ruling

There's a research by standard chartered with $2.70 in the April.

https://research.standardchartered.com/c..._12_05.pdf

Came across that when I tried to figure out the % of revenue and EPS Myanmar beer is contributing to F&N. I have yet to find one disclosed by F&N; so I have to calculate with the news.

246M==7.5 PE; Therefore trailing earnings (TTM?) should be 32.8M USD with 55% stake. Total MB earnings should be 32.8/0.55 = 59.64M
With 1,444,910,386 shares, EPS ~ 2.27cents which would translate to ca 2.88 SG cents.

F&N trailing 12 months (estimation) EPS is 2.5+2.5+2.6+3.0=10.6 cents.
Without Myanmar beer, earnings reduced by 27% to ca 7.72cents.
20x7.72=154 cents
30x7.72 =232 cents

With F&N at 20PE and Myanmar 2.88centsx50PE (PEG), we arrive at $2.98.

The question is how much can F&N can sell the 55% stake?

Personally, I don't think they could get a 50xPE (an offer of 1640M). If they get a value that's lower than that, what can they do with the "unlocked value" to compensate for the elevated valuation for growth?

Another question would be how much F&N has gained in the intangibles in working in Myanmar. It was declared that F&N is going to bring its brands (100Plus) into Myanmar. It feels like the distribution channel etc were all MBL related. Without the affiliation, can F&N still get into Myanmar?

Losing my "Myanmars" real fast. Lost Royal Myanmar Tea in VizBranz not too long ago.

(Vested and disturbed)

CIMB report on F&N, with TP S$2.98 (?) and rating Reduce.

The MBL accounted substantially for F&N earning, based on a briefing in a EGM. The analyst estimated as 30%, but it should be more than that, IIRC.

(not vested)

Tough to say Mai Pen Rai
Arbitrators have ruled in favour of MEHL in the arbitration 0f Myanmar
Brewery (MBL). We view this as a major setback for F&N. MBL was the last
crown jewel of F&N, with EBIT +44% yoy and accounting for 30% of earnings,
by our estimates. We expect its share price to react negatively. The positive
out of the arbitration was a nod that the original US$246m offer from MEHL
is grossly inadequate. A fair value will be decided duly. By switching to a
sum-of-parts (SOP) basis, we cut our target price to S$2.98 as we do not
expect MEHL to pay valuations implied by the market. We downgrade from
Add to Reduce. F&N will also have to plug an earnings hole with the proceeds.
...
http://remisiers.org/cms_images/research...__F__N.pdf

Fraser and Neave will be reporting Fy2014 results today.......hopefully theres a guidance from management about the timeline for the sale of Myanmar Breweries and what they going to do with the proceeds....

I think as long they distribute the proceeds for MBL, which is likely as TCC would want the cash, the theme behind FNN is still intact

IIRC MBL was a very small part of the breakup value when sum-of-parts were done on FNN during the takeover battle. The residual focus was on fate of FNN Malaysia.