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06-03-2014, 10:36 AM
The following are my thoughts on FCL after DBS V issued a post HK roadshow reports:
- Its a part of the planned profiling by Towkay himself. The introduction of FCL without public offering is an direct way to breakup F&N conglomerate structure,
- Its a transition period to gauge where market values both totally different entity before planning for next moves for both,
- So far F&N appears to have been accorded the rich F&B valuations that it deserves and hence there could be potential M&A between Towkay's Thai F&B interests before free float there is being enhanced,
- On FCL, the property arm is of the right size and platforms. However as FCL was delisted back in early 2000, the track record has been hidden within F&N and hence market is not willing to accord a fairer valuation. Hence, there is an obvious need to keep profiling FCL (asset light strategies via existing REITs and new hospitality REIT), development arm and landbanking,
- To enhance market's confidence in Towkay (not merely viewing him as another asset stripper due to the high profile leverage buyout of F&N), Towkay has self imposed a 6 months moratorium on his 88% holdings post listing to reiterate his commitment in FCL notwistanding his intention to eventually dilute at a fairer price.
Having said all the above, one thing is certain - Towkay is a good strategist and with a good asset base to work with and a good team of professional, time and patience is simply what is needed on part of investors to allow the process to unfold and fairer value to emerge.
Vested
- Its a part of the planned profiling by Towkay himself. The introduction of FCL without public offering is an direct way to breakup F&N conglomerate structure,
- Its a transition period to gauge where market values both totally different entity before planning for next moves for both,
- So far F&N appears to have been accorded the rich F&B valuations that it deserves and hence there could be potential M&A between Towkay's Thai F&B interests before free float there is being enhanced,
- On FCL, the property arm is of the right size and platforms. However as FCL was delisted back in early 2000, the track record has been hidden within F&N and hence market is not willing to accord a fairer valuation. Hence, there is an obvious need to keep profiling FCL (asset light strategies via existing REITs and new hospitality REIT), development arm and landbanking,
- To enhance market's confidence in Towkay (not merely viewing him as another asset stripper due to the high profile leverage buyout of F&N), Towkay has self imposed a 6 months moratorium on his 88% holdings post listing to reiterate his commitment in FCL notwistanding his intention to eventually dilute at a fairer price.
Having said all the above, one thing is certain - Towkay is a good strategist and with a good asset base to work with and a good team of professional, time and patience is simply what is needed on part of investors to allow the process to unfold and fairer value to emerge.
Vested
