Fraser and Neave Ltd (F&N) shares rose on Monday
after the Singapore property and drinks company proposed to
distribute S$4.73 billion ($3.8 billion) in cash, or S$3.28 per
share, to shareholders.
The proposed cash payout accounts for around 85 percent of
the S$5.6 billion proceeds from selling its 40 percent stake in
Tiger Beer maker Asia Pacific Breweries Ltd to Dutch company
Heineken NV last year.
F&N shares gained as much as 3.7 percent to S$9.21, the
highest since April 22. Shares of Thai Beverage surged
as much as 6.4 percent to a record of S$0.67. More than 84
million Thai Beverage shares were traded, 1.6 times the average
full-day volume over the past 30 days.
Thai billionaire Charoen Sirivadhanabhakdi, through Thai
Beverage and TCC Assets Ltd, is F&N's biggest shareholder. In
January, the tycoon won a two-month battle with a group led by
Overseas Union Enterprise Ltd for F&N's remaining
After the cash payout, CIMB Research expects F&N to have a
net gearing of 0.17 times and RNAV (revised net asset value) of
F&N's second-quarter earnings were lifted by its food and
beverage as well as property units, CIMB said, adding that the
second half of 2013 is expected to be stronger as many overseas
development projects will be completed.
DBS Vickers raised its target price on F&N to S$9.52 from
S$8.99 and maintained its 'hold' rating, saying it expects
limited downside for the share price on the back of the
company's proposed cash distribution and stable earnings.
It also initiated coverage of Thai Beverage with a 'buy'
rating and a target price of S$0.80. Thai Beverage is a market
leader in spirits and green tea and has an established
distribution network in Thailand, DBS said.