F&N to restore free float, remain listed

SINGAPORE - Fraser and Neave (F&N) will seek to restore its free float and remain a listed stock, the property and beverage company announced on Thursday.

Vehicles for F&N's major shareholder Charoen Sirivadhanabhakdi are "currently in discussions" with the Singapore Exchange (SGX) about restoring the free float, F&N said in a statement.

The announcement came two months after trading in F&N shares was halted following the completion of a takeover by Mr Charoen, one of Thailand's richest men. He holds more than 90 per cent of F&N's shares, leaving the stock's free float below the 10 per cent minimum to remain listed.

In order to restore the free float, Mr Charoen will either have to sell some of the shares that he acquired at $9.55 apiece during the takeover or place out newly issued F&N shares.

No deal chatter has yet to emerge, according to checks with market players over the past week.

Observers have said that it is unlikely that the market would be willing to pay $9.55 per share in a placement, given that Mr Charoen's purchase price included a control premium.

SGX on April 1 gave F&N until yesterday to declare its listing intention. If F&N had not stated its intention to remain listed by the deadline, SGX would have suspended the stock.

Shares of ThaiBev closed at 57.5 cents on Thursday, down by 3.4 per cent or two cents.

A stock analyst, who declined to be named for compliance reasons, said that a publicly listed F&N could make it more difficult for Mr Charoen to realise synergies between F&N's drinks business and his Singapore-listed beverage maker Thai Beverage Public Co.

ThaiBev's minority shareholders may also not be keen on their company having an exposure to F&N's property assets. ThaiBev holds just shy of 30 per cent of F&N's outstanding shares.

"It will be trickier to restructure the entities . . . ThaiBev was a pure food and beverage (F&B) play, but F&N has property as well as F&B," the analyst said.

ThaiBev and F&N could potentially seek benefits through operational tie-ups such as distributorship and licensing agreements, the analyst noted. But an equity restructuring would have been cleaner and more efficient.

The analyst said that ThaiBev's share price has yet to account for potential synergies with F&N because of the uncertainties on that front. "I think most of the initial information has been priced in . . . but future growth synergies have not been priced in yet."

Analysts had initially expected Mr Charoen to pursue a delisting of F&N, citing the flexibility that a private company would accord an owner seeking to restructure the business.

But key appointments to F&N's board at the start of April swung sentiment around.

On April 2, F&N announced that it had hired former Singapore finance minister Richard Hu as a senior adviser to the board. A day later, the company announced the rehiring of former F&N chief of F&B Koh Poh Tiong as a director and adviser to the board.

F&N would not have gone through the trouble of hiring such high-profile names, and the appointees would not have accepted their positions, if the business was going to be taken private, the new thinking went.

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