F&N is down 0.2% at $9.27, outperforming the STI’s 0.5% decline amid speculation a bidding war may emerge after OUE said it is in talks on a potential offer to counter TCC Assets’ $8.88/share bid.
“On the plus side for OUE is that F&N is a much better fit than (Thai tycoon) Charoen, who originally had designs on APB, not the conglomerate as a whole. But on the downside, OUE is relying on partners to mount a bid, which could get messy when it comes to funding and controlling stakes in F&N,” says Justin Harper, market strategist at IG Markets Singapore, in a note.
He says shareholders could see more value from an OUE bid, both from a higher offer price and from a potential F&N breakup, noting the Thai group indicated it plans to keep F&N a single entity.
“Shareholders will be keen to know who the partners are and see the color of their money before they entertain this as a serious rival bid for F&N. Kirin (the most speculated interested party) or Coca-Cola would definitely add credibility to OUE’s takeover talk as big players in the soft-drinks industry.”
F&N volume is strong after a series of large trades at $9.29-$9.30; but the stock appears unlikely to garner enough momentum to retest its $9.49 all-time high, tapped Friday. OUE is down 0.4% at $2.79 on trade resumption. Around 29% F&N stakeholder ThaiBev, the deal’s only player in a win-win no matter the bid’s outcome, is up 1.2% at $0.425.
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