F&N boosted by property spin off plan

F&N boosted by property spin off plan

Fraser & Neave Ltd (F&N), controlled by Thailand's richest man Charoen Sirivadhanabhakdi, climbed the most in five weeks on plans to spin off its property business through a Singapore listing at the end of the year.

Shares of the 130-year-old company with investments from food and beverage to publishing increased as much as 5.1% and rose 2% to S$5.60 as of 9.49am in Singapore trading, set for the biggest jump since July 23. The company will offer two shares of its unit Frasers Centrepoint Ltd. for every stock held, it said in a statement on Tuesday.

F&N is spinning off a unit with S$9 billion (US$7 billion) of assets as of June, allowing both companies to focus on their separate expansion strategies. The move follows the S$13.8 billion takeover earlier this year by billionaire Charoen, aged 69.

"This makes the company a more transparent organisation," Jonathan Foster, Singapore-based director of Global Special Situations at Religare Capital Markets, said, adding that he plans to buy F&N shares on the spin off. "This helps enhance valuations. Conglomerates are always treated with a bit of a discount."

The listing of the property arm is expected in November or December, according to the statement, and the two companies will be traded separately on the Singapore exchange.

Frasers Centrepoint is also considering plans for a hospitality trust, according to the statement. It has a S$2.4 billion pipeline of commercial and retail properties as well as S$1.65 billion worth of hospitality assets that could be injected into its property trusts, Lim Ee Seng, chief executive officer of Frasers Centrepoint, said in a briefing on Tuesday.

Mr Charoen has a net worth of $6.9 billion, according to the Bloomberg Billionaires Index.

DBS Group Holdings Ltd, United Overseas Bank Ltd (UOB), and Morgan Stanley are financial advisers for the transaction.

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