Thai Beverage

Thai Beverage: SCB maintaining O/p with $0.75 TP. House see a 75% probability that TCC Assets would inject F&N‟s food and beverage (F&B) business into Thai Bev. Believe TCC is likely to retain control of F&N, primarily as a property company. Thai Bev could then acquire F&N‟s F&B business and the potential deal could be funded by selling its 29% stake in F&N to TCC. F&N has until 19 July to restore its free float to a minimum of 10%, which would entail the placement of 4.7mn shares. The restructuring could unleash THB 8b of synergies for Thai Bev and could enhance value. The recent developments could represent a prelude to this restructuring. Thai Bev trades at a 14% discount to the regional beverage sector’s P/E average. Based on house scenario analysis, the discount may widen to 26%.