Frasers Property (formerly: Frasers Cpt (FCL))

[specuvestor]

Since a year ago we have already discussed what would be TCC's plans with FNN and ThaiBev

I continue to believe ThaiBev and FNN are cashcow ATMs to pay for the acquisitions. I'm waiting for the final act of FCL and FNN swap. In this Australand acquisition, likely ThaiBev will be the biggest contributor for the funding.

[freedom]

Whether which companies within are cash cows is not a concern for him at all. He does not need excess cash in the holding level unless he tries to make another large acquisition on the holding level as cash is the worst performing asset for a business owner. Cash merely ensures liquidity and solvency, but does not generate adequate return. The merely cash flow required in the holding level are for interest payment and maybe a little debt repayment.

It is entirely unnecessary to extract more than enough cash from its operating companies as the regular dividend payment is sufficient.

FCL will continue to be the oversea property platform for the foreseen future among his business empire. He is not buying FCL to liquidate it. Any expectation of extracting more value from it will be duly surprised. FCL will behave like any other normal property company though dividend yield could be a little higher than Capitaland/CityDevelopment/Keppel Land, but nothing significantly different.

[greengiraffe]

CIMB Maintain ADD:

Business as usual
3Q and 9MFY14 core net profit was in line at 25% and 70% of our and
consensus full-year estimates. During the quarter, FCL recorded strong
growth on recognition of development earnings and was active on the
capital-recycling front. While much of the recent attention has been on its ALZ
transaction, we note that FCL remains fundamentally strong with S$2.7bn of
unrecognised development revenue, stable investment properties and a
growing hospitality segment. We maintain our Add rating and raise our
target price to S$2.12 (30% discount to RNAV), largely due to higher target
prices for FCT and FCOT and slightly lower FY14-16 EPS.
Results in line, strong on development earnings
FCL’s PBIT grew over 50% yoy, largely due to higher development earnings
from 1) the sale of Changi City Point (CCP), 2) the completion of Chengdu
Logistics Hub Phase 2, and 3) overseas developments in Australia and the UK.
Property sales was slower this quarter, partly contributed by a lack of launches.
The upcoming launches in Australia should see healthy demand and sales.
Active capital recycling
Management continues to execute on its capital-recycling plans. We estimate
that ~S$800m in capital was unlocked from the sale of 50%-owned CCP and
the listing of Fraser Hospitality Trust (FHT). With the capital deployed, FCL
was also active on the acquisition front, purchasing Sofitel Sydney Wentworth
for ~S$240m, additional stakes in FCT and FHT for ~S$300m and the
Sembawang Drive EC site for S$240m.
Add on strong fundamentals and cheap valuations
Solid fundamentals. While much of the recent attention has been focused
on the ALZ transaction, we note that FCL is fundamentally strong. It has locked
in S$2.7bn of unrecognised revenue from its development segment, which
should provide some earnings stability despite the weak residential markets in
Singapore and China. The commercial properties are stable and we anticipate a
continual injection of pipeline assets into its REIT platforms. The hospitality
segment is on track to manage more than 10,000 apartments by 2014.
FCL is cheap, with valuations at a 42% discount to RNAV vs. peers’ 33%.

[greengiraffe]

Inline with my expectations - no reason for SGP to be asking for anything. If they are happy they can always be a private strategic holder with Towkay Chaoren...

Frasers Centrepoint stonewalling on Stockland side deal
THE AUSTRALIAN AUGUST 12, 2014 12:00AM

Sarah Danckert

Property Reporter
Melbourne
AUSTRALAND’S new parent entity, Singapore’s Frasers Centrepoint, is continuing to play hardball with the company’s second-largest shareholder, Stockland, as relations between the two groups remain strained.

It is understood Frasers has little intention, if any, of carving out a side deal with Stockland, which is yet to sell its 19.9 per cent stake into the Singapore group’s $4.48 a share offer.

Frasers is also believed to be pushing ahead with its plans to delist Australand when its offer closes on August 21 — even if it has not acquired 90 per cent of the company’s shares.

The tactics underscore the toughness of Frasers largest shareholder, Thailand’s Chang Beer baron Charoen Sirivadhanabhakdi, who owns the company through his private investment vehicle TCC and beverage empire ThaiBev.

Australand yesterday announced it had appointed three new board members — Frasers Centrepoint chief executive Lim Ee Seng, TCC adviser Chotiphat Bijananda and Panot Sirivadhanabhakdi, Mr Charoen’s youngest son. Another issue facing Stockland is whether Australian law permits an asset-for-equity swap with Frasers. There appear to be two schools of thought.

Some in the market have pointed to collateral benefit provisions in the Takeovers Act, which prohibit a suitor giving benefits to certain shareholders during the offer period if they are likely to induce acceptances under the bid.

Others in the market have emphasised GPT Group’s experience after the company’s takeover offer for Commonwealth Property Office Fund was trumped by rival bidders Dexus-Canada Pension Plan Investment Board. In that case, GPT’s unlisted fund, GPT Wholesale Office Fund, brokered a side deal with Dexus over certain assets.

The argy-bargy over Australand comes as Frasers reported a 60 per cent decline net profits for the third quarter of $109.2 million, despite its revenues being up 41 per cent to $575.4m during the same period.

[desmondxyz]

How to delist Australand with 19.9% stake with Stockland?

[greengiraffe]

All quiet on $2.6b bid
Matthew Cranston
454 words
12 Aug 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
A strategy to keep Frasers ­Centrepoint guessing on whether Stockland will accept its $2.6 billion takeover bid for Australand Property Group will not influence a decision to exclusively sell assets to Stockland.

Reports have surfaced over the last few days which indicate Stockland might be bargaining with Frasers to gain an exclusive right to buy assets in ­Australand in a similar vein to the way GPT Group bargained with DEXUS Property Group last year.

Frasers and Stockland have both repeatedly refused to make any public statements on their positions, but sources close to the parties have noted that any bargaining for assets would contravene the takeover rules.

If Stockland decided to accept an offer to sell its $520 million, 19.9 per cent stake in Australand into Frasers' offer and gain any exclusive right to buy Australand assets, that would be seen as a "collateral benefit" and be an illegal action.

It would be seen as ­giving an advantage to one shareholder over others.

Ownership Matters governance expert Martin Lawrence said such collateral benefits were dealt with ­differently in takeovers than they were in schemes of arrangements.

"The courts have made some very interesting decisions on collateral benefits when it comes to schemes of arrangement," Mr Lawrence said.

Such instances include the recent acquisition of David Jones by South African retailer Woolworths where shareholder Solomon Lew had his Country Road business purchased in exchange for selling his shareholding in David Jones.

Other controversial instances include the sale of Macquarie Communication Infrastructure Group in 2009 and Whitehaven Coal's 2012 acquisition of Nathan Tinkler's listed Aston Resources.

In the real estate sector there have been similar situations. Last year GPT Group missed out on an attempt to take over the Commonwealth Property Office Fund. DEXUS Property Group won the takeover instead but both it and GPT Group negotiated over $1 billion worth of asset sales.

The difference in that situation was that GPT Group had technically not been a shareholder and had only taken an option to buy stock.

Other similar examples include Centro walking away with some of the AMP Shopping Centre Trust assets in 2003 instead of fighting it out for ­control with competing bidder ­Westfield Group.

Frasers' offer for Australand has been extended until August 21 after the group achieving the 50 per cent acceptance level. It can now delist Australand and plans to do so.

On Monday Frasers announced the appointment of three directors to the Australand board, including Panote Sirivadhanabhakdi, Chotiphat Bijananda and Lim Ee Seng.

Market observers suggest that Stockland, led by Mark Steinert, will wait until its full-year results on August 18 to disclose its intentions.


Fairfax Media Management Pty Limited

Document AFNR000020140811ea8c0000y

[greengiraffe]

http://www.businesstimes.com.sg/premium/...t-20140812

PUBLISHED AUGUST 12, 2014
Strong operational profits at Frasers Centrepoint

But Q3 net profit slumps on lower fair value gains, higher exceptional loss
BYLYNETTE KHOO
lynkhoo@sph.com.sg @LynetteKhooBT

'Delivering value to shareholders and growing core earnings through the disciplined execution of our growth strategies remains our focus.'
- FCL chief executive Lim Ee Seng
application/pdf iCONFrasers Centrepoint Limited
FRASERS Centrepoint Limited (FCL) is still looking to replenish its landbank in Singapore selectively, even as it develops its key overseas markets of Australia and China.
Having divested six hospitality assets to Frasers Hospitality Trust (FHT) which listed last month, the group will continue reviewing its portfolio to identify suitable assets for capital recycling, said a group spokesman.
FCL yesterday reported strong operational performance for the fiscal third quarter ended June 30, despite a 59.7 per cent slump in net profit to S$109.2 million.
The decline in net profit was due mainly to lower fair-value gains and higher exceptional loss than in the year-ago period; the exceptional loss of S$12.8 million came mainly from stamp duty arising from the acquisition of Sofitel Sydney Wentworth in Australia.
Excluding these items, FCL's net profit would have surged 77.2 per cent to S$120 million on the back of project completions in China, the sale of completed units in Australia and in the UK and gains from disposing its half-stake in Changi City Point to associate Frasers Centrepoint Trust (FCT).
FCL's revenue and profit before interest and tax (PBIT) jumped 41 per cent and 56 per cent year on year to S$575.4 million and S$160.3 million respectively, led by stronger contributions from development projects and hospitality operations.
Revenue from development projects jumped 50 per cent to S$472 million, thanks to improved performances in Singapore and overseas. The hospitality segment marked an 18 per cent rise in revenue to S$53.5 million on the back of higher occupancies registered at Fraser Suites Queens Gate in the UK, as well as Fraser Place Melbourne and Fraser Suites Perth in Australia.
For the first nine months of the fiscal year, FCL's revenue grew 58 per cent to S$1.7 billion, while net profit before fair-value change and exceptional items surged 62 per cent to S$346.2 million. After accounting for fair-value gains and exceptional items, net profit fell 38.6 per cent to S$300 million.
Commenting on the stronger operational results, FCL chief executive Lim Ee Seng said: "We undertook several key corporate actions that enabled the group to optimise capital productivity and strengthen our income base, as well as diversify our earnings across markets and increase recurring income."
This month, FCL's takeover offer for Australand turned unconditional after receiving sufficient valid acceptances for the A$4.48-a-share bid.
Upon completion of the deal, FCL will see a substantial increase in asset and profit contribution from outside Singapore and greater recurring income, the group said.
FCL derived gross proceeds of S$654.7 million from its injection of the six serviced residences into FHT, the S$1.67 billion portfolio of which includes six hotels from FCL's substantial shareholder, TCC Group. As part of its review, the group may divest suitable retail and office properties to FCT and Frasers Commercial Trust to optimise asset mix and yield, its spokesman said.
Despite the slowing residential market here, FCL reckons that land-banking opportunities could still surface as the bids for government sites moderate.
Last month, FCL acquired a 22,190 square metre executive condominium site in Sembawang Avenue through an 80-20 joint venture with Keong Hong Holdings. The plot is expected to yield around 620 residential units.
As at end-June, the group had unrecognised revenue of about S$1.9 billion and S$0.8 billion in Singapore and overseas respectively. Its Sengkang condo project RiverTrees Residences is 53 per cent sold; QBay Residences in Tampines is 99 per cent sold.
The FCL spokesman said: "Our strong pre-sales and recurring income from investment properties and Reits will continue to support our financial performance."

[toiletsiao]

theres an interesting development going on in ALZ now.. credit suisse just reported an increase in their stakes for Australand

http://www.asx.com.au/asxpdf/20140812/pd...gx7x7r.pdf

from 7.91% to 8.95% within 2 days... Credit Suisse is not one of the financial advisors for FCL (SCB and DB are the appointed ones)..

seems like someone is still holding out for a higher offer.....should stockland put out a higher bid...is it possible for FCL to flip what they have now (60% of ALZ) for a quick profit? Not so familar with how these things go about in australia...... actually charoen did something similar in nature not too long ago on his flipping of APB (Asia Pacific Breweries) shares ....in that particular case he is successful in squeezing out a higher offer from Heineken

[greengiraffe]

Never say never but SGP has no financial muscle and given their poor history with M&A, I highly doubted that they will make such move given that SGP holders will be going for the management's blood should they pass up an opportunity to lock in quick and good gains...

GG

theres an interesting development going on in ALZ now.. credit suisse just reported an increase in their stakes for Australand

http://www.asx.com.au/asxpdf/20140812/pd...gx7x7r.pdf

from 7.91% to 8.95% within 2 days... Credit Suisse is not one of the financial advisors for FCL (SCB and DB are the appointed ones)..

seems like someone is still holding out for a higher offer.....should stockland put out a higher bid...is it possible for FCL to flip what they have now (60% of ALZ) for a quick profit? Not so familar with how these things go about in australia...... actually charoen did something similar in nature not too long ago on his flipping of APB (Asia Pacific Breweries) shares ....in that particular case he is successful in squeezing out a higher offer from Heineken

[freedom]

I wonder where is the capital to support the bid for Australand? Can't be all funded by debt as FCL is a public company, not a private holding company.