Fraser & Neave (F & N)

[weijian]

hi ghchua,

Just to clarify, my earlier post is just directed at the question of whether "there will be a privatization effort" posted by VB Curiousparty. Nothing much about the business of F&N.

Obviously, some of us have been in this forum long enough to discern between a good investment and good company. Just like how a P/E=50 company (reflecting high investors' expectations) just need a little disappointment for a big drop, a P/E=5 company (reflecting low investors' expectations) also just need a little positive surprise for a decent gain.

My only reservation is that OPMIs may not be able to capture much gain, especially after looking at the structure. And also how long that gain may be. Our Thai GodFather didn't really get so rich by sharing his riches consistently. This is one elephant that I realized that I have no temperament to ride with.

[donmihaihai]

The bidding takeover ended when Thai billionaire topped with a generous $9++ bid. That was like 11 years back. F&N shareholders back then who accepted it and owned F&N shares before the bidding of Asia pacific breweries would be very happy on the outcome. Those who did not, one can do the calculation from then till now return.

Around 2014 was also a period where companies like F&N, Super Group, Delfi, Food Empire were trading at rich valuation. Not anymore. There will be investors who rode all the way down and new investors will be looking at these companies, except Super Group currently, trying to ride them up.

Vinamilk look valuable now, but it was more valuable back in 2017, more than 2X current price, when additional purchases turned Vinamik into associate from investment. What would the future be?

Since F&N is part of Thai billionaire empire, isn't trying to figure out whether to privatise F&N or not will require thinking like what would he do with the amount of capital on hand and where to deploy? That is assuming he is not going to do another F&N.

[specuvestor]

The Thai billionaire is more concerned about the LBO cashflow than valuations per se with Thai Bev cashflow as the anchor. That's why there was a rapid succession of restructuring including REITs and bonds before the onset of GFC. The other one that pulled this off was Lippo with OUE etc if I remember correctly.

Frankly it was quite an awesome spectacle as a bystander to see all these deals fast forwarded (not PLAY out mode) within 2 years

IMHO I agree as an empire builder he will be more interested with acquisitions and deploying capital that will leverage on a listco cashflow rather than privatise. That said the dividend payout will continue to be optimal as it's a cashflow upwards that will help to delever.