Fraser & Neave (F & N)

[NTL]

Finally, the SGX Annc (5 nos.)

Looks like it is going to be a spinoff and then FNN to participate in FCL placement. Means FNN give away FCL and then use S$1b to buy some back.

The interesting thing is, F&N will subscribe for $1Bil of new FCL shares so that it can give out (all) as Dividend-in-Specie.. ie. F&N biz left with F&B + PP (Printing & Publishing)... no Properties! More details from pg12 of one of the SGX Annc.

Did a quick read. Seems like it going to split, and split again next time when it does a Hospitality REIT.

Let's see what my 1 lot of F&N will end up with.

[CityFarmer]

Finally, the SGX Annc (5 nos.)

Looks like it is going to be a spinoff and then FNN to participate in FCL placement. Means FNN give away FCL and then use S$1b to buy some back.

The interesting thing is, F&N will subscribe for $1Bil of new FCL shares so that it can give out (all) as Dividend-in-Specie.. ie. F&N biz left with F&B + PP (Printing & Publishing)... no Properties! More details from pg12 of one of the SGX Annc.

Doesn't it the purpose? The most important is TCC continue to own it, in same % of stake, but higher in $ value

Assume Mr. Market value the FCL share in PB of 1 i.e S$5905 mil, then the DIS worth around $4.08 per F&N share owned. (refer to page 6 of the presentation slide below)

http://infopub.sgx.com/FileOpen/Investor...eID=254081

My previous latest valuation of F&N, after capital distribution of $3.28, was $5.75 base on SOTP. Property segment was valued at $5310 mil i.e. $3.68

Update the model now, with property valued as $5905 mil. The updated valuation of F&N pre-DIS is $6.16

So far so good, and more will come IMO...

(vested)

[KopiKat]

Let's see what my 1 lot of F&N will end up with.

First step, 1 F&N becomes 1 F&N + 2 FCL

From SGX Annc (Slide 6, last slide), NAV,

Pre-DIS : F&N ($5.59)
Post-DIS : F&N ($1.69) + FCL ($2.04 * 2) = $5.77

The increase in NAV per share and Total Equity arises from revaluation of investment properties, as well as realisation of gains from DIS

[NTL]

Let's see what my 1 lot of F&N will end up with.

First step, 1 F&N becomes 1 F&N + 2 FCL

From SGX Annc (Slide 6, last slide), NAV,

Pre-DIS : F&N ($5.59)
Post-DIS : F&N ($1.69) + FCL ($2.04 * 2) = $5.77

The increase in NAV per share and Total Equity arises from revaluation of investment properties, as well as realisation of gains from DIS

There is one more step before this. I received $3280 from capital reduction.

[PkNanas]

Distribution of FCL does not address free float problem of F&N and listed FCL.

I think a placement of F&N share will take place, and increase free float of F&N and eventual listed FCL.

The placement can be combination of new F&N shares and/or vendor shares (TCC and/or ThBev).

Placement of some Vendor shares will address the over-leverage of ThBev and TCC.

If so, what is the placement price?

[KopiKat]

Distribution of FCL does not address free float problem of F&N and listed FCL.

I think a placement of F&N share will take place, and increase free float of F&N and eventual listed FCL.

The placement can be combination of new F&N shares and/or vendor shares (TCC and/or ThBev).

Placement of some Vendor shares will address the over-leverage of ThBev and TCC.

If so, what is the placement price?

I was thinking a possible fast and easy solution is for ThaiBev to place / sell some in the open market since they got theirs for $8.88 from OCBC + Open mkt, before TCC raised the G.O. price to $9.55. At $8.88, net of all dividends and Capital Payout = $5.445, still lower than last close of $5.49. If prices rises tomorrow, even more in-the-money..

Possible? Any codes / regulations that prevents the above?

[swakoo]

I was thinking a possible fast and easy solution is for ThaiBev to place / sell some in the open market since they got theirs for $8.88 from OCBC + Open mkt, before TCC raised the G.O. price to $9.55. At $8.88, net of all dividends and Capital Payout = $5.445, still lower than last close of $5.49. If prices rises tomorrow, even more in-the-money..

Notice that the deadline to restore free float is 31 Dec 2013.

And one of the objectives/benefits of this proposed demerger is "Create Investment Flexibility for the Shareholders" of which ThaiBev and TCC are shareholders too. DIS is targeted to complete end Nov/early Dec.

So maybe the purpose of DIS to the Thai tycoon is really to facilitate:
- ThaiBev disposing of some or all of it's 28.6% stake in FCL post-DIS (while retaining it's 28.6% stake in F&N post-DIS) and
- TCC disposing of some of it's 61.7% stake in F&N post-DIS (while retaining it's 61.7% stake in FCL).

Disposals post-DIS (and restoration of free floats) would then be cleaner in terms of alignment of control of the various vehicles. Unknown is if pricing will be better this way.

[Dividend Warrior]

Will FCL become the sponsor of FCT?

[KopiKat]

I was thinking a possible fast and easy solution is for ThaiBev to place / sell some in the open market since they got theirs for $8.88 from OCBC + Open mkt, before TCC raised the G.O. price to $9.55. At $8.88, net of all dividends and Capital Payout = $5.445, still lower than last close of $5.49. If prices rises tomorrow, even more in-the-money..

Notice that the deadline to restore free float is 31 Dec 2013.

And one of the objectives/benefits of this proposed demerger is "Create Investment Flexibility for the Shareholders" of which ThaiBev and TCC are shareholders too. DIS is targeted to complete end Nov/early Dec.

So maybe the purpose of DIS to the Thai tycoon is really to facilitate:
- ThaiBev disposing of some or all of it's 28.6% stake in FCL post-DIS (while retaining it's 28.6% stake in F&N post-DIS) and
- TCC disposing of some of it's 61.7% stake in F&N post-DIS (while retaining it's 61.7% stake in FCL).

Disposals post-DIS (and restoration of free floats) would then be cleaner in terms of alignment of control of the various vehicles. Unknown is if pricing will be better this way.

I suppose they'll need a waiver from SGX to list FCL with less than 10% free float, assuming it's possible...

[swakoo]

Will FCL become the sponsor of FCT?

FCL will be a more focused sponsor of FCT and FCOT with some possible benefits:

- FCL’s balance sheet will be further strengthened through the re-capitalisation (net gearing lowered to 36%) thus boosting it's ability to collaborate with it's reits

- TCC Group will grant FCL the Right of First Refusal (“ROFR”) over any opportunity to invest in, develop and/or manage TCC Group’s real estate assets, and a right to participate in any bidding process in respect of TCC Group’s real estate assets anywhere in the world except for Thailand