Thai Beverage

Thai Beverage: Religare note that ThaiBev and TCC Assets now look like winners, after the two said they would be voting in favor of Heineken's bid for F&N's holdings in APB. Houseestimates after the APB deal, ThaiBev could make around $2b net-net, a whopping 46% cash return on its investments, helping its balance sheet. TCC now needs to come up with around $8.8b to take over F&N and will receive around $5.4b from the APB sale. House won't be surprised if several mths later ThaiBev and Heineken come up with another distribution agreement for ThaiBev products. The "worst-case" scenario for the Thai group is to remain majority F&N stakeholders without being able to delist F&N, if the SG co's board rejects its bid. ThaiBev holding 29.99%, TCC about 1% and Kirin owning 14% is "still a messy structure, but ThaiBev and TCC could get control of F&N with ThaiBev focusing on FNH and TCC on property without having to bring S$8.8b. With Thailand to join the Asean trading link next mth in Oct, Thai retail investors may finally get the opportunity to own Thai Bev -- their own local consumer play. Thai Bev is currently only listed in Singapore. The potential for a new segment of investor class to support Thai Bev may give the recent momentum more legs to run.