New Myanmar Brewery valuation still painfully cheap, say analysts

F&N is getting the shorter end of the stick.

Fraser and Neave is losing its extremely lucrative majority stake in Myanmar Brewery for a song, according to CIMB analysts.

Although the stake has been valued at US$560m--more than double the original offer by F&N’s joint venture partner Myanma Economic Holdings (MEHL)--CIMB noted that the price is still “far below” what MBL would be worth in the open market.

“While the independent valuation is more than double the original low-ball valuation offered by MEHL, it is still only valuing the beer business at about 12.3x FY15 P/E, i.e. very cheap. F&N got a better deal but it certainly did not get a good deal. Clearly, the earnings taken for the valuations were the beer earnings some years ago, when beer had not done as well yet,” said CIMB.