SINGAPORE (May 24): Shares of Fraser and Neave got a jolt of caffeine after the company, controlled by Thailand’s richest man, announced plans to enter the Thai coffee market.
F&N, better known for its 100Plus isotonic sports drink, jumped the most in 10 months after saying its joint venture unit would buy out Starbucks Corp’s operations in Thailand.
The deal --- that people with knowledge of the matter said could value Starbucks’ operations there at more than US$500 million ($687 million) -- sparked an early rally of as much 5.2% in F&N’s shares. Shares in F&N ended Friday 5 cents higher at $1.78, with 120.7 million shares changing hands.
“Starbucks is an iconic brand, which will prosper in the burgeoning Thai consumer market,” Nirgunan Tiruchelvam, head of consumer-sector equity research at Exotix Partners, said by telephone on Friday.
Thai Beverage PCL, which owns 28.5% of Singapore-based F&N, will become a “regional consumer powerhouse with Starbucks, KFC, Chang beer and Thai spirits under its belt,” he said. ThaiBev shares closed flat at 79.5 cents on Friday.
F&N said the venture will bolster its presence in Southeast Asia and is expected to contribute to earnings in the current financial year ending September.
F&N, which also sells Magnolia milk, Fruit Tree juice drinks and King’s ice cream, generated about 40% of its annual revenue in Malaysia, more than a third from Thailand and about a quarter from Singapore, according to the data provided by the company.
