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Where Next For F&N?

Fraser and Neave (F&N) (SGX: F99) announced after the market close on 28 June 2013 that a special resolution on a proposed capital reduction plan was unanimously passed at the Extraordinary General Meeting held on the same day.

The capital reduction exercise involves returning $3.28 per share to shareholders as part of the company’s proceeds from selling Asia Pacific Breweries to Heineken N.V. last year. The exercise totals around S$4.7 billion.

F&N will make an announcement in due course on exactly when it will take place, once all necessary approvals are obtained. It is expected that the cash distribution will be paid to shareholders on or about 31 July 2013.

On the same day, the conglomerate also announced that it will appoint advisers to study and review alternative strategic options to unlock shareholder value. This may involve a segregation of its property-related businesses from its non-property related businesses.

Furthermore, F&N announced yesterday that it had appointed two separate Chief Executive Officers – one to oversee the beer department and the other to manage the non-alcoholic beverage division.

All these follow a long corporate tussle that involved F&N, Thai Beverage Public Company Limited (SGX: Y92) and Overseas Union Enterprises Limited (OUE) (SGX: LJ3) from September 2012 to January 2013.

On 13 September 2012, Thai Beverage and TCC Assets Limited issued an announcement to a mandatory conditional cash offer for F&N at S$8.88 per share. The mandatory conditional cash offer was triggered after TCC acquired about 1.37% of F&N between S$8.80 to S$8.88 per share, bringing the combined interest of TCC and Thai Beverage in F&N to 30.36%.

On 15 November 2012, OUE entered the fray. It made a voluntary conditional cash offer at S$9.08 per share for all the shares of F&N.

On 18th January 2013, TCC and Thai Beverage upped the ante by offering S$9.55 per share.

On 21st January 2013, OUE withdrew its offer. TCC and Thai Beverage now control 90.28% of F&N.

F&N is still quoted on the Singapore Exchange after it decided to keep its listing status. The approval to remain listed was granted by SGX on 19 April 2013. F&N has three months – until 19 July 2013 – to restore its public float to at least 10% and this would entail a disposal of around 4.7 million shares.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.