No change in Cocoaland’s ownership

Business & Markets 2013
Written by by Cynthia Blemin of theedgemalaysia.com
Thursday, 09 May 2013 09:34
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KUALA LUMPUR: Market rumours on COCOALAND HOLDINGS BHD
[]’s major shareholder, Leverage Success Sdn Bhd, selling its 38%
stake in the confectionery manufacturer to Hong Kong’s Swire Pacific
Ltd are baseless although there have been talks between the two
parties.
This was revealed yesterday by Datuk Ng Jui Sia, the CEO of Fraser &
Neave Holdings Bhd, which holds the second biggest stake of 27% in
Cocoaland as at Jan 22 this year.
“We have not been approached, nor have we been told by our major
shareholder of a potential buyer,” Ng said when asked to clarify the
news circulating in the market on the possible change in ownership of
Cocoaland.
Local dailies have reported the potential change in the company’s ownership to Swire Pacific if the price is right.
AmResearch Sdn Bhd said in its report the price for the block of Cocoaland shares sought by Swire Pacific could be worth as
much as RM250 million or RM3.82 per share.
This represents a 36% premium to the fair value, the research house said. At an asking price of RM3.82 per share, the
implied price-earnings ratio is 31 times of 2012 financial year earnings. “The valuation appears to be rather steep, in
comparison to its closest competitors, Three-A Resources at 24 times, and Apollo Food Holdings at nine times,” it said.
Swire Pacific has diversified interests in property, aviation, beverages, marine services, and trading and industrial. Its
operations are predominantly based in the Greater China region.
AmResearch said the Cocoaland stake acquisition would allow Swire Pacific, one of the largest Coca-Cola bottlers, to further
expand its food and beverage foothold.
Swire Pacific holds franchising, manufacturing, marketing and distribution rights of Coca-Cola products in Hong Kong, Taiwan,
seven provinces in mainland China and 11 states in the western part of the US.
Ng told at an analysts’ briefing that F&N Holdings plans to maintain its core market leadership and increase the distribution of
newly launched products.
With the synergy resulting from the recently concluded corporate takeover of Singapore-based Fraser & Neave Ltd by TCC
Asset, the group’s prime emphasis would be to enhance customer service and brand awareness instead of pricing.
Ng said for the dairy products segment, F&N Holdings is aiming to maintain its 60% market share. The group has a 30% to
35% market share for the ready to drink products and 85% for soft drinks.
Apart from re-aligning the Seasons brand this year and maintaining its 100Plus leadership market, he said the group plans to
launch the Oishi range of green tea from its operations in Thailand. This will start next month.
The group’s key driver in the soft drinks division is 100Plus, which is supported by its new variants such as 100 Plus Edge and
MyCola, which replaces Coca-Cola.