F&N

F&N: Deutsche believe that given APB’s significance to FNN’s consumer operations, it is questionable whether or not FNN will agree to divest APB. Firstly, in the event that FNN rejects the offer, cannot rule out the possibility of Heineken revising its offer given its balance sheet capacity at 34.6% Debt to Assets. Secondly, Heineken may start to build a stake in FNN, potentially sparking moves by Kirin and ThaiBev to raise their stakes. Thirdly, Heineken may decide sharing APB may be better than paying an unpalatable premium, and find a way to coexist, given its equal influence in APB, which Deutsche believe this is the most likely scenario. House values F&N at $9.31 pegged to 10% discount to RNAV. House have also tightened NAV discount to 10%(on par with the period following Kirin’s acquisition).