OUE F&N offer not compelling, says analyst

It still falls on the low side of F&N’s valuation.

IG Markets Singapore noted:

At the last-minute last night OUE finally announced its counter bid for Fraser & Neave slapping down a $9.08 a share offer for the conglomerate. While this betters the $8.88 deal from the Thais it is hardly a compelling offer.

The $13.1 billion price tag OUE has placed on F&N, partly funded by Kirin which wants the F&B arm, still falls on the low side of the $12bn - $16bn valuation that F&N feels it is worth.

With OUE wanting to bag the property assets and offloading the soft drinks arm to Kirin it is a match made in heaven for the two companies. But F&N shareholders will take a lot of convincing that they are not being sold short.

The Thais 22 November deadline is less than one week away although F&N shareholders probably won’t need that long to reject it. Instead they will need time to mull over the new offer which currently falls short of F&N’s current share price of $9.13.

What the latest offer coming in at just 20 cents a share higher than the Thais it leaves the battle nicely poised for Thai tycoon Charoen to come back with an improved offer that beats OUE and puts the game out of reach once and for all. The phone line to his financial backers could be busy for most of the day.

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