ThaiBev proposes share swap involving Frasers Property, F&N shares
The beverage manufacturer wants to divest its real estate stakes to become a pure-play F&B business
THAI Beverage (ThaiBev) has proposed a share swap which will result in the beverage manufacturer exiting the property business and becoming a pure-play food and beverage company.
ThaiBev will transfer its entire 28.78 per cent shareholding in Frasers Property to TCC Assets, an entity owned by the Sirivadhanabhakdi family.
ThaiBev is also owned by the Sirivadhanabhakdi family. The annual report states that Thai business magnate Charoen Sirivadhanabhakdi has a 65.85 per cent deemed interest, through various entities, in the beverage company, as at Dec 11, 2023.
TCC Assets will then transfer its 41.3 per cent stake in Fraser and Neave (F&N) to ThaiBev’s indirect wholly owned subsidiary InterBev Investment.
The share swap will be executed at an estimated ratio of 1.88 Frasers Property shares for each F&N share. This is based on a negotiated price of S$1.89 per Fraser Property share and S$3.55 per F&N share, ThaiBev said on Thursday (Jul 18).
The negotiated prices were also supported by a “robust valuation assessment” by DBS – ThaiBev and InterBev Investment’s financial advisor.
ThaiBev’s holdings in F&N will rise to 69.61 per cent post-completion.
Meanwhile, TCC Assets’ stake in Frasers Property will increase to 86.89 per cent from 58.1 per cent. Its holdings in F&N will drop to 17.6 per cent from 58.9 per cent.
ThaiBev will convene an extraordinary general meeting (EGM) in Thailand to garner shareholder approval for the proposed share swap in accordance with Thai laws. This means shareholders who own shares through the Central Depository (CDP) will need to instruct the CDP to exercise the voting rights on their behalf.
The group is also looking into organising a dialogue session for Singapore-based shareholders to engage with the management ahead of the EGM.
“Our aim with the proposed share swap is to entrench our position as a stable and sustainable Asean leader and cement our pure-play status by exiting the property business,” said ThaiBev group chief financial officer Prapakon Thongtheppairot.
The group will also be better positioned to strengthen the collective potential of ThaiBev’s non-alcoholic beverage segment and F&N’s beverage and food brands, expanding its reach in South-east Asia.
ThaiBev, a leading beverage producer in Thailand, has business segments spanning spirits, beer, non-alcoholic beverages, and food. Its key brands are Chang, Sangsom and Hong Thong.
It also holds a controlling stake in Sabeco, Vietnam’s largest beer player by market volume, with brands such as Saigon Beer, Lager, Export, and 333.
The pro forma accretion to earnings and improvement in debt-to-earnings before interest, taxes, depreciation and amortisation ratio will also allow ThaiBev to enhance its operational synergies and financial strength.
Alfie Yeo, senior research analyst at RHB Singapore, said the impact of the move is beneficial to shareholders who desire full exposure to the F&B business.
“The transaction is also slightly earnings-per-share accretive, based on the pro forma last 12 months March 2024 financials, and has better interest-bearing debt to Ebitda (earnings before interest, taxes, depreciation and amortisation),” he told The Business Times.
He added that further synergies could be realised in the future between ThaiBev and F&N “when both non-alcoholic beverages divisions merge into a more streamlined leadership within ThaiBev”.
Meanwhile, Paul Chew, head of research at Phillip Securities, said the transaction is “almost a non-event” for ThaiBev, but may mitigate some volatility inherent from the property development and fair-value changes at Frasers Property.
“Separately, (the deal) also makes a privatisation of Frasers Property more palatable. There is less leakage to minority shareholders if a privatisation occurs,” he noted.
Both analysts said the share-swap ratios appear to be fair.
In separate filings, Frasers Property and F&N said that the proposed transaction is between their substantial shareholders, and that the two companies are not parties to the proposed deal.
Shares of ThaiBev rose 1 per cent or S$0.005 to S$0.50 on Thursday, while those of Frasers Property rose S$0.02 or 2.5 per cent to S$0.82. F&N shares soared 21.5 per cent or S$0.23 to S$1.30.
