TCC not revealing much in its F&N takeover offer

Come to think of it, why did TCC block the capital reduction exercise?

Here's more from Nomura:

In its takeover document published on 27 Sep 2012, TCC offered few clues on its intentions for F&N apart from saying that:
• It intends to be a long-term strategic shareholder, and continues to believe in the longterm prospects.
• Depending on the outcome of the F&N offer, it intends to undertake a review of the company’s businesses and operations and evaluate various strategic options.
• It has no intention of making material changes to the existing businesses or redeploying fixed assets of the company or discontinuing the employment of existing employees of the F&N group.

Our take is that the group is not revealing much so it has the flexibility to manoeuvre during its current takeover offer. It is also interesting to note that TCC blocked the capital reduction exercise presumably to signal to investors that its offer is the only one on the table and the capital distribution is no longer available to shareholders.

Shareholders should note that the current board can embark on other options to return cash back to shareholders including a special dividend or a higher dividend payout.