Fraser & Neave (F & N)

[toiletsiao]

Charoen has placed out some of his FNN liao...theres a huge block trade of 36mil shares done earlier in the morning...that works out to be about 2%++ of FNN

[CityFarmer]

Valuation of $6.70 per share, base on SOTP of $3.83 for FCL and $2.86 for F&N without property.

IMO, the FCL valuation is fair, but the F&N without property is slightly overvalued, at least not now, without full visibility of the synergy between ThaiBev and F&N.

OSK/OMG report:
F&N has raised its buyout offer to remaining bondholders as
it seeks certain concessions ahead of a business restructuring involving a spinoff
of its property division. For the $108.25 million of 5.5 per cent notes due 2016, it
raised its offer to redeem the bonds at par plus 6.5 per cent and accrued interest,
from its earlier offer of par plus 2.75 per cent and accrued interest. For the $200
million of 6 per cent notes due 2019, it raised its early redemption offer to par
plus 9 per cent and accrued interest, from par plus 3 per cent and accrued
interest. Noteholders who accept the proposals before the business close of Dec
16 will receive an additional early-bird fee of 50 basis points, and a bondholders'
meeting to vote on the proposals will take place on Dec 23. The sweetened offer
is likely to get the buy-in of remaining bondholders, in our view, enabling the
company to avoid a strategic default and clearing the coast for the listing of its
property division, Fraser Centerpoint Limited (FCL). The demerger will be carried
out by way of a 2-for-1 free distribution of FCL to its shareholders. We see F&N
as a restructuring play with prospects of narrowing its NAV discount with the
spinoff of its property division, with additional drivers from synergies derived with
ThaiBev and TCC Assets on the F&B and property fronts, respectively. Our
SOTP valuation of $6.70/share, based on a valuation of SGD3.83 for FCL
(pegged to 25% discount to RNAV) and SGD2.86 for the beverage and nonproperty
business, offers 17% upside from current levels. (Goh Han Peng)

Ref: http://remisiers.org/cms_images/research...atters.pdf

[ngcheeki]

Married deals at $5.6 with a volume of 36,860 lots transacted this morning. Look like the free float requirement is met via share placement. Any idea who are the people who subscribed to the placement share? The next milestone is the listing of FCL share early Jan 2014.

08:47:44 Others 5.603 0.001 4,630.0 -9.0
08:41:54 Others 5.602 0.006 13,800.0 -5.0
08:41:09 Others 5.596 5.596 18,430.0 18.0

vested

[freedom]

Thought they have placed some shares before to meet the public float requirement? Why again? lack of fund?

[CityFarmer]

Thought they have placed some shares before to meet the public float requirement? Why again? lack of fund?

This is the action to meet the free-float requirement. The 2% sale, has reduced his stake to slightly below 90%.

(vested)

[freedom]

Think I mistook it with China Minzhong. Sorry for that. Thanks for correction.

[ARC]

Correct me if I am wrong, but i think the married trades today amounted to ~61mn shares, or ~4.2% of total share base.

It is assumed that this placement is done by Thai Towkay for the free float requirement. But we will have to wait till the official SGX annoucement to confirm that, which is not out at time of writing.

The crucial question now is this, imo - what % of MI is currently in the hands of parties that may be friendly to Charoen?

This is a crucial question as the original MI, prior to the married trades, were able to control the outcome of any (potentially) damaging related party transactions. And in doing so, protect their interest.

With the introduction of more MI that are potentially friendly to Charoen, the rules of the game may have changed. For those who are not friends with Charoen, can you still protect your interest?

Food for thought.

----
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[CityFarmer]

Correct me if I am wrong, but i think the married trades today amounted to ~61mn shares, or ~4.2% of total share base.

It is assumed that this placement is done by Thai Towkay for the free float requirement. But we will have to wait till the official SGX annoucement to confirm that, which is not out at time of writing.

The crucial question now is this, imo - what % of MI is currently in the hands of parties that may be friendly to Charoen?

This is a crucial question as the original MI, prior to the married trades, were able to control the outcome of any (potentially) damaging related party transactions. And in doing so, protect their interest.

With the introduction of more MI that are potentially friendly to Charoen, the rules of the game may have changed. For those who are not friends with Charoen, can you still protect your interest?

Food for thought.

There was a 2nd batch of married deals at 3pm, amounted to ~26 mil shares, on top of the 1st batch before 9am, amounted to ~37 mil shares. Yes, I agree the confirmation should come from disclosure update.

I am not sure who's "interest" you are referring to? In SGX Rules, general resolution needs simple majority i.e. 50%+1 and special resolution needs 75%+1. So the Towkay's interest is well protected.

[ARC]

I am referring to minority interest. After all, I have no interest in making sure Towkay's interest is protected.

Yes, you are right on the point about resolutions. But for related party transactions, the related party is not allowed to partake in the voting, which protects the MI. So for instance, if Towkay wants to pump some assets he own into F&N or sell F&N assets to related parties - which could be ugly assets or desirable assets at an undesirable price - MI are technically able to fend for themselves.

However, it is not clear that MI can effectively defend themselves going forward, given a potential shift in the MI composition.

Happy to be corrected if I am wrong on the intepretation of SGX rules or on my read of the situation.

----
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http://www.i3institute.com
http://www.facebook.com/i.invest.institute

[CityFarmer]

I am referring to minority interest. After all, I have no interest in making sure Towkay's interest is protected.

Yes, you are right on the point about resolutions. But for related party transactions, the related party is not allowed to partake in the voting, which protects the MI. So for instance, if Towkay wants to pump some assets he own into F&N or sell F&N assets to related parties - which could be ugly assets or desirable assets at an undesirable price - MI are technically able to fend for themselves.

However, it is not clear that MI can effectively defend themselves going forward, given a potential shift in the MI composition.

Happy to be corrected if I am wrong on the intepretation of SGX rules or on my read of the situation.

In IPT, related parties need to abstain from voting on the resolution. So MI will also be protected.