4 things you need to know about F&N's newest suitor

It goes by the name of Lippo.

Nomura looked at why the Lippo group might be interested in F&N from the financial perspective.

Here's more from Nomura:

Following the divestment of APB and with suitors keen on F&N’s non- property business, we argue that F&N looks attractive to Lippo as may be able to gain access to F&N’s property business at an attractive valuation.

Lippo may be attracted to F&N’s undervalued property assets. Although the market cap of F&N is large, the divestment of APB and the possible sale of its other non-property assets may present Lippo with the opportunity to acquire F&N’s property assets at an attractive price, in our view.

TCC’s SGD8.88 offer implies a 47% discount for F&N’s property business. Using the IFA’s valuation of F&N’s property business of SGD6.2bn and assuming the non-property businesses can be divested at our valuation of SGD9.2bn (including cash receivable of SGD5.6bn from Heineken), the implied discount to the property business based on TCC’s offer price is 47%.

At a higher price of SGD10.21, the discount is 19%. Even if Lippo offers a higher price of SGD10.21 (15% higher than TCC’s offer), it will be acquiring F&N’s property business at a 19% discount, based on the IFA valuation.

Kirin’s stake will be key to how this takeover plays out. Kirin’s stake will be an important swing factor. We think that Kirin will hold out for a higher price or may even align with Lippo if this allows it to enhance its interest in F&N’s food and beverage businesses.