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F&N Jumps Most in 4 Months on Property Spinoff

F&N Rises to 5-Week High on Property Spin Off
Traffic moves past Frasers Centrepoint Ltd.'s The Centrepoint mall on Orchard Road in Singapore. Photographer: Munshi Ahmed/Bloomberg

Aug. 28 (Bloomberg) -- Fraser & Neave Ltd., controlled by Thailand’s richest man, climbed the most in four months on plans to spin off its property business through a Singapore listing at the end of the year.

Shares of the 130-year-old company with investments from food and beverage to publishing climbed 4.2 percent to S$5.72 at the close in Singapore trading, the biggest jump since April 25. The company will offer two shares of its unit Frasers Centrepoint Ltd. for every stock held, it said in a statement yesterday.

F&N, as the company is known, is spinning off a unit with S$9 billion ($7 billion) of assets as of June, allowing both companies to focus on their separate expansion strategies. The move follows the S$13.8 billion takeover earlier this year by Thai billionaire Charoen Sirivadhanabhakdi.

“This makes the company a more transparent organization,” Jonathan Foster, Singapore-based director of Global Special Situations at Religare Capital Markets, said by phone, adding that he plans to buy F&N shares on the spin off. “This helps enhance valuations. Conglomerates are always treated with a bit of a discount.”

The listing of the property arm is expected in November or December, according to the statement, and the two companies will be traded separately on the Singapore exchange.

Frasers Centrepoint is also considering plans for a hospitality trust, according to the statement. It has a S$2.4 billion pipeline of commercial and retail properties as well as S$1.65 billion worth of hospitality assets that could be injected into its property trusts, Lim Ee Seng, chief executive officer of Frasers Centrepoint, said in a briefing yesterday.

Charoen has a net worth of $6.9 billion, according to the Bloomberg Billionaires Index.

DBS Group Holdings Ltd., United Overseas Bank Ltd. and Morgan Stanley are financial advisers for the transaction.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editors responsible for this story: Andreea Papuc at apapuc1@bloomberg.net; Sarah McDonald at smcdonald23@bloomberg.net

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