Fraser and Neave

[LenaHuat]

Hi mojo
Thanks a million for correcting my mistake. It shows how far my memory has receded.........cannot remember things that occurred in the last few years.
This is compounded by the fact that I don't hold any REIT except A-iREIT and so FCT slipped my mind completely.

I gonna also admit that I have not been to either Anchorpt, Causewaypt or Northpt for the last some 6-7 years.

Back to the commercial reitization story, I don't think F&N can pull it off this year.

Hi SanSan
My only recollection of Anchorpt was how quiet the mall 'used to be' when I last visited it cuz of Ikea across the road. There used to be lots of Jap expats living in the condo behind the mall but I think they have made Queens their hub now.

[winston]

Fraser & Neave, a Singapore beer-to-property conglomerate said it will not appoint a new group chief executive but will instead have CEOs for each of its three business divisions.

[winston]

Not vested. From Kim Eng:-

Fraser & Neave – Company update (Gregory Yap 64321450) Previous day closing price: $4.53
Recommendation: Buy (maintained)
Target price: $6.00 (unchanged)

No more pretense about finding a one-size-fits-all CEO
F&N’s search for a group CEO has ended, and the company has decided that it is next to impossible to find one person who possesses all the necessary experience and skills to lead such a fundamentally distinct group of businesses – especially when the necessary management talent already exists within the group to lead each business separately.

Instead, F&N will appoint leadership from within
To that end, F&N will split the position into two, namely F&B and Property, while options for printing & publishing will be reviewed by Morgan Stanley. Koh Poh Tiong, the CEO of APB, will resign and head the entire F&B business of F&N, including dairy, soft drinks and glass, while Lim Ee Seng will continue to head the property division.

Eyeing greater F&B contribution to even out the mix
The current property-heavy business mix, the result of outstandingly successful launches during the bull market, has obviously been a source of concern, given the current soft market conditions. Hence, management is eyeing a structure that will increase the contribution to total profits from the previously under-rated F&B business.

But that may be asking too much
While Mr Koh is undoubtedly a capable CEO, lifting F&B contributions to property’s current level may challenge even him. Alternatively, a balance can be achieved if property starts to flag, but that is also not a win-win solution. Ultimately, it would be better to measure F&B independently of property. Anything else would be unfair to the F&B CEO.

Stage is set for more out-of-the-box thinking
By separating the divisional responsibilities, we believe the stage is being set for the group to shift the goal posts. Ultimately, it would be more ideal, both for shareholders and divisional management, for F&N to separate the F&B and property businesses. A conglomerate approach was good while it lasted, but something more radical is needed now.

[kennynah]

hey...i've always thought the 2nd son was the chief honcho of f&n? no?

[winston]

From DBS:-

A bigger restructuring on the cards? - a possibility over the medium term. We do not rule out a possible restructuring or break-up of the Group to maximize shareholders’ value.

As mentioned above, this would probably not be in the immediate term. We believe management would need to take a step at a time to:
(i) restructure and spin-off P&P;
(ii) build up F&B to a more substantial level (in terms of profit contribution, currently accounting for only c. 25% of Group's net profit) before any possible restructuring of the F&B and Property businesses.

What lies ahead? In our view, the appointment of Mr Koh as CEO F&B is a positive move for F&N with a key figure to drive developments on this front. Also, Mr Koh is a veteran in the F&B industry having been at the helm when APB embarked on its regionalization plan into Vietnam, Cambodia, Thailand, Mongolia, India, among others.

FNN has always indicated their desire to build up their F&B with the S$900m cash "war chest"
from Temasek Holdings new shares placement back in Jan 07 (at a price of S$4.38/share). Going forward, we maintain our stance that things are looking positive and interesting for the Group on developments from the F&B and strategic review of the Printing & Publishing, backed by profit contributions from its Properties division.

[iam802]

Separation is good.

It allows for greater focus. I always like companies that is more focus. I hate 'diversification' theory. Focus and become market leader = bigger market cap.

Diversify = safe, security...but hardly move anywhere.

Just my opinion. Going into my watchlist.

[winston]

More heads may not be better than one
By EMILYN YAP

IT HAS occupied the minds of shareholders and analysts, taken up column space in newspapers and piqued the interest of the general public. All eyes have been on Fraser & Neave's (F&N) search for a new CEO since last October, but after months of waiting, the group announced yesterday that the search is off. Instead, it will have three divisional chiefs reporting to the board.

Up until May, however, F&N had said that finding a group CEO remained a priority. So what happened? The group is likely to face many questions as the market attempts to understand the reasons behind the decision to go without a CEO and its possible impact.

First, F&N had attributed the end of the CEO search to 'the difficulty of recruiting one person who possesses all the necessary combined skill sets to realise the full potential of (the group's) businesses'. But would this succinct statement be sufficient to convince shareholders?

General Electric has Jeff Immelt, Johnson & Johnson has William Weldon, and a sceptic would find it intuitively hard to believe that there would be an absolute dearth of talent in the region, much less in the world. And F&N, while diverse, isn't beyond comprehension.

To convince these cynics, F&N may wish to provide more details of its CEO search, such as how candidates were pursued and what screening criteria were used. How many candidates did it consider? Was it prepared to pay market rate for the right talent? Thus far, such information has not been forthcoming. Shareholders have a right to know, because the search would have cost the company some good money.

The second big question concerns the effectiveness of the new management structure. CEOs play a critical role in providing not just strategic direction but also the 'public face' for the business. Hence, shareholders are likely to wonder how effective a conglomerate without an overall leader would be.

According to F&N, the CEOs of its food and beverage, properties, and publishing and printing businesses will report to the board through the chairman's office. It seems a cumbersome arrangement. With F&N's established track record and the CEOs' experience in their respective fields, the structure may work well under normal circumstances.

But if the group were to encounter a major business opportunity or an exceptional crisis, this set-up may slow the decision-making process. And who would be the one responsible for key decisions which could shape the organisation's future as a whole, and not just in parts?

It also leaves open the role of the board now. The board's usual mandate is to provide a form of check and balance on the CEO. Now, with not one but three CEOs and a less-than-clear management structure, the board may have to take a more active role in managing the affairs of the group. That may then compromise its independence from management.

The other issue that could spur the most speculation is whether F&N's businesses may be split. Market talk of such a move is not new, but is likely to be renewed as the group embarks on a strategic review of its publishing and printing business. An analyst told BT yesterday that the new decentralised structure could facilitate the breaking up of the conglomerate as each core business already has its own CEO.

F&N's search for a CEO may have ended, but with all the new questions that are coming up, it looks like a new chapter to the saga is only just beginning.

[helios]

Business Time Singapore - Singapore's beer-to-property conglomerate Fraser and Neaveis looking to sell $125 million (US$92 million) worth of two-year bonds with a semi-annual coupon of 3.6 per cent, a banking source familiar with the deal said.

The fixed-rate bond will mature on July 9, 2010, the source said, speaking on condition of anonymity.

Fraser and Neave, which does not have a credit rating, declined to comment.

DBS Group is the sole manager of the deal.

Singapore firms have been tapping the domestic bond market for funds after the global credit crisis made US dollar borrowing more expensive.

Fraser and Neave, which brews Tiger beer, sold $125 million worth of one-year bonds with a coupon of 2.43 per cent in May, and $250 million worth of three-year bonds with a coupon of 3.38 per cent in April.

The bond sales, part of a $2 billion multi-currency medium-term note programme, funded Fraser and Neave's outstanding debt, the firm said. -- REUTERS

[kennynah]

smart fella....borrow at lower costs to pay for the higher costs earlier loans...

[qxing78]

F&N closed at $4.45 today. Rem. Temasek bought 15% stake in 2006 at $4.38.
Reaching soon... You all think can buy?