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(29-08-2013, 03:20 PM)specuvestor Wrote: [ -> ]IMHO based on what they are doing, the base case and logical conclusion is ThaiBev will align with FNN beverage while TCC will align with FCL

Someone has to foot ThaiBev's LBO bill. But if the remainder SGD1b from APB sale goes to FCL (which likely in future will in one way or another go into TCC), then ThaiBev will either get their cash by selling FCL shares (or swap FNN shares with TCC) and maybe FNN leverage up (aka capital management) and buyback ThaiBev's FNN shares.

Key is to figure out 1) how can ThaiBev delever, especially when i/r are expected to go up and 2) what would YOU do if you are TCC to maximise your interest.

I think it is likely there will be Act 3 for FNN but it is time to think about the exit strategy for FNN. OTOH ThaiBev shareholders' interest IMHO will depend largely on what price FCL will be sold or swapped.

PS CityFarmer is on the same wavelength but I think FNN will pay for ThaiBev while FCL will pay for TCC (through asset injection/ REIT) Big Grin

ThaiBev needs F&N's F&B, to rejuvenate its business, and I believe F&N's F&B needs ThaiBev too. I think it is very unlikely ThaiBev will give-up on F&N. The likely option is ThaiBev give-up FCL to delever.

(not vested on ThaiBev, but vested on F&N)
(29-08-2013, 03:20 PM)specuvestor Wrote: [ -> ]IMHO based on what they are doing, the base case and logical conclusion is ThaiBev will align with FNN beverage while TCC will align with FCL

Someone has to foot ThaiBev's LBO bill. But if the remainder SGD1b from APB sale goes to FCL (which likely in future will in one way or another go into TCC), then ThaiBev will either get their cash by selling FCL shares (or swap FNN shares with TCC) and maybe FNN leverage up (aka capital management) and buyback ThaiBev's FNN shares.

Key is to figure out 1) how can ThaiBev delever, especially when i/r are expected to go up and 2) what would YOU do if you are TCC to maximise your interest.

I think it is likely there will be Act 3 for FNN but it is time to think about the exit strategy for FNN. OTOH ThaiBev shareholders' interest IMHO will depend largely on what price FCL will be sold or swapped.

PS CityFarmer is on the same wavelength but I think FNN will pay for ThaiBev while FCL will pay for TCC (through asset injection/ REIT) Big Grin


I see! agree agree agree. TCC being a business entity / owned by businessman, of course is to maximise profits from all their "operating companies", being FCL, FNN, Thaibev (where they are the majority shareholders). I suppose I am more concerned with their treatment of minority shareholders. So far seems ok, and if that's the case, I would like to ride with them (which alot of the forummers here already do) to make money !

Anyways, in regards to Thaibev being highly geared, actually I am not so worried. The net debt / EBITDA is still less than 3x, which is actually quite acceptable for a FMCG company of its size post M&A. Like you pointed out, these guys have strong cash flow generating ability. Most beverage companies in the world grow through M&A by levering up and using their strong cashflow to pay down debts.
(29-08-2013, 03:33 PM)CityFarmer Wrote: [ -> ]
(29-08-2013, 03:20 PM)specuvestor Wrote: [ -> ]IMHO based on what they are doing, the base case and logical conclusion is ThaiBev will align with FNN beverage while TCC will align with FCL

Someone has to foot ThaiBev's LBO bill. But if the remainder SGD1b from APB sale goes to FCL (which likely in future will in one way or another go into TCC), then ThaiBev will either get their cash by selling FCL shares (or swap FNN shares with TCC) and maybe FNN leverage up (aka capital management) and buyback ThaiBev's FNN shares.

Key is to figure out 1) how can ThaiBev delever, especially when i/r are expected to go up and 2) what would YOU do if you are TCC to maximise your interest.

I think it is likely there will be Act 3 for FNN but it is time to think about the exit strategy for FNN. OTOH ThaiBev shareholders' interest IMHO will depend largely on what price FCL will be sold or swapped.

PS CityFarmer is on the same wavelength but I think FNN will pay for ThaiBev while FCL will pay for TCC (through asset injection/ REIT) Big Grin

ThaiBev needs F&N's F&B, to rejuvenate its business, and I believe F&N's F&B needs ThaiBev too. I think it is very unlikely ThaiBev will give-up on F&N. The likely option is ThaiBev give-up FCL to delever.

(not vested on ThaiBev, but vested on F&N)

Hi CityFarmer you may have misread me Smile I meant FNN will partly pay for ThaiBev's LBO through its cashflow one way or another, rather than ThaiBev sell out FNN Smile
(29-08-2013, 03:37 PM)rokcradle Wrote: [ -> ]I see! agree agree agree. TCC being a business entity / owned by businessman, of course is to maximise profits from all their "operating companies", being FCL, FNN, Thaibev (where they are the majority shareholders). I suppose I am more concerned with their treatment of minority shareholders. So far seems ok, and if that's the case, I would like to ride with them (which alot of the forummers here already do) to make money !

Anyways, in regards to Thaibev being highly geared, actually I am not so worried. The net debt / EBITDA is still less than 3x, which is actually quite acceptable for a FMCG company of its size post M&A. Like you pointed out, these guys have strong cash flow generating ability. Most beverage companies in the world grow through M&A by levering up and using their strong cashflow to pay down debts.

Minority shareholders of F&N should benefit together with Mr. Towkay. It is not due to a generous Mr. Towkay, but an alignment of the interest with him. I don't foresee it will change in near future.

As for minority shareholders of ThaiBev, I am not so sure. At the moment, I do see mid-term benefit, from synergy with F&N's F&B segment.
(29-08-2013, 03:37 PM)rokcradle Wrote: [ -> ]I see! agree agree agree. TCC being a business entity / owned by businessman, of course is to maximise profits from all their "operating companies", being FCL, FNN, Thaibev (where they are the majority shareholders). I suppose I am more concerned with their treatment of minority shareholders. So far seems ok, and if that's the case, I would like to ride with them (which alot of the forummers here already do) to make money !

I doubt that they intentionally set out to treat minority shareholders well. Rather, it's just a spillover when they take care of themselves.... That's why some of us here are spending so much time trying to figure out their next steps... how they're going to milk the cow further and how we may be able to enjoy some of the spilled milk...Tongue

F&N is a more established name, with a much longer history. But, ThaiBev is still a favourite son. I suppose the likely scenario as some has pointed out, would be to consolidate the holdings with ThaiBev being the direct parent of F&N (TCC being the grandparent) and TCC becoming the parent of FCL. The suggested means would be a share swap between ThaiBev & TCC with their F&N and FCL stakes, after the DIS has been effected.

But, based on NAV, ThaiBev will still be short ie. their FCL stake is not enough to swap for all of F&N (from TCC). Small matter, as TCC will still be in ultimate control of all the listed entities. Main issue perhaps is to reduce ThaiBev gearing and what I think may be for them to sell some of their Beverage operations (non-alcoholic + Beer) to F&N (which becomes geared). If I'm right, I'll definitely be more interested in ThaiBev....Tongue
CityFarmer, we have exactly opposite views on the benefits.

Minority shareholders in F & N are unlikely to get a free ride on Mr. Towkay's tail. The ones to be benefited should be Mr. Towkay and Thai Beverage. They are the ones who put out their efforts to create values, not the minority shareholders of F & N or the management of F & N. Mr. Towkay benefits from the demerger of the property business and the beverage business no matter what price FCL and F & N are. However, for minority shareholders, you are only benefited if FCL & F & N trades high enough.

Thai Beverage shareholders benefits even more. It has gone through a great length and deserves all the benefit. The price after the acquisition of F & N shares and today's huge run-up are the clear indications.
(29-08-2013, 04:15 PM)KopiKat Wrote: [ -> ]F&N is a more established name, with a much longer history. But, ThaiBev is still a favourite son. I suppose the likely scenario as some has pointed out, would be to consolidate the holdings with ThaiBev being the direct parent of F&N (TCC being the grandparent) and TCC becoming the parent of FCL. The suggested means would be a share swap between ThaiBev & TCC with their F&N and FCL stakes, after the DIS has been effected.

But, based on NAV, ThaiBev will still be short ie. their FCL stake is not enough to swap for all of F&N (from TCC). Small matter, as TCC will still be in ultimate control of all the listed entities. Main issue perhaps is to reduce ThaiBev gearing and what I think may be for them to sell some of their Beverage operations (non-alcoholic + Beer) to F&N (which becomes geared). If I'm right, I'll definitely be more interested in ThaiBev....Tongue

NAV of ThaiBev is S$3.6 bil, while F&N post-DIS is S$2.8 bil. It is definitely over-stretching for ThaiBev to solely own F&N, imo

I have to admit that I have no clue the outcome of F&N post-DIS and ThaiBev yet...Tongue

Will stay tune... Might have money on the table if lucky...Big Grin
KopiKat Wrote: [ -> ]But, based on NAV, ThaiBev will still be short ie. their FCL stake is not enough to swap for all of F&N (from TCC). Small matter, as TCC will still be in ultimate control of all the listed entities. Main issue perhaps is to reduce ThaiBev gearing and what I think may be for them to sell some of their Beverage operations (non-alcoholic + Beer) to F&N (which becomes geared). If I'm right, I'll definitely be more interested in ThaiBev....Tongue

I think F&N will get the Beer as well as all liquor and ThaiBev will be out of alcohol totally with an aim to be moved back to Thai listing. Possible?
(29-08-2013, 07:02 PM)felixleong Wrote: [ -> ]http://sgx.i3investor.com/blogs/cimbrese.../10740.jsp

How will ThiaBev solve the free float issue with the share swap?
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