It is now F&N's second-largest shareholder with 205.5m shares
By SIOW LI SEN
TEMASEK Holdings yesterday took a 14.9 per cent stake in Fraser & Neave, paying $900 million cash in an unusual departure for the investment company which in recent times has been investing outside Singapore as part of its portfolio rebalancing.
Temasek - through Seletar Investments - bought the 205.5 million new F&N shares, paying $4.38 a piece to become the drinks company's second-largest shareholder, after the OCBC/Lee family group whose stake falls to just under 19 per cent from 22.06 per cent.
F&N shares, in which trading was halted pending the announcement, last closed at $4.48. At a press conference yesterday, Nicky Tan of nTan Corporate Advisory, the F&N director who brokered the deal with Temasek, said the sale price was based on the past 10 days' weighted average price.
Temasek will nominate two directors to the F&N board, said F&N chief executive Han Cheng Fong at the press conference.
'We intend to use the proceeds to expand the business, grow the business and make acquisitions in F&B (food and beverage),' Dr Han said.
He said much of the group's earnings come from property and Temasek's participation will help strengthen the group's food and beverage business as it extends its reach further into the region, and the longer term goal of making Tiger beer a global brand.
Food and beverage contributed 26 per cent to group profit of $320 million, second to property's 66 per cent. The remaining 8 per cent came from printing and publishing.
Beer profit was about 20 per cent of the group's attributable profit before exceptionals of $295 million.
'I think you can say that Temasek has an objective, medium term to be invested one-third in Singapore, one-third in emerging markets, one-third in the OECD (developed markets) . . . this is not cast in stone,' said Temasek executive director Simon Israel to a question on whether the latest investment represented a change in strategy.
'At the end of the day, we will move the weighting in between those as we see appropriate, as we see opportunities. We are quite open to investments in Singapore where we see opportunity and value,' he said. A significant portion of F&N's business is regional, he pointed out.
One of Temasek's investment themes is to serve the emerging growing middle class in Asia, said Mr Israel.
'In the context of that theme, F&N fits very nicely in terms of serving the emerging middle class, and as a company, is very well positioned to do so because if you look at its geographic presence, it spans from China to South-east Asia, all the way to India,' he said.
At the end of March, Temasek's investments were valued at $129 billion. Its exposure to Singapore was 44 per cent, down from 49 per cent in the year before.
The last significant investment into a local company was in September 2004 when Temasek increased its stake in Neptune Orient Lines to over 67 per cent from 29 per cent.
