2 possible reasons behind ThaiBev's shocking decision to keep F&N listed

ThaiBev, TCC own 90.3% of F&N.

According to CIMB, in Apr 2013, TCC and Thai Bev indicated to SGX that they intend to keep F&N listed. TCC and Thai Bev own a combined 90.3% of F&N currently.

Restoring the free float to 10% simply entails a sell-down of just 0.4% or a placement of some new F&N shares. From the perspective of share price impact, this seems like a manageable exercise and if so, it is unlikely to trigger an immense share price de-rating.

Here's more from CIMB:

TCC and Thai Bev have three months to restore F&N’s public float to above 10%.

The decision to keep FNN listed is an unexpected one, considering that a cleaner structure would emerge if Thai Bev and TCC were to take the group private.

In his Thai Bev report entitled “A more convoluted restructuring” and dated 21 Apr 2013, Singapore Head of Research Kenneth Ng sees two possible reasons for this decision:

1) TCC has geared up when it spent S$8.5bn to buy 61.7% of F&N. A public listing of F&N will allow TCC’s current stake in F&N to act as better collateral.

2) F&N has better brand value across ASEAN and if the intention is for Thai Beverage to become a regional F&B player, there could be better brand awareness if F&N is kept listed and the other consumer assets are held under F&N.

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