Richest Coffee Takeover in Asia Seen With Super Group: Real M&A

Bloomberg Businessweek
News From Bloomberg

http://www.businessweek.com/news/2014-01-15/richest-coffee-takeover-in-asia-seenwith-super-group-real-m-an -a
Bloomberg News
Richest Coffee Takeover in Asia Seen With Super Group Real !"A
B! "ngus #hitle! $anuar! 1%& 2014 'uper (roup )t . *'+,-./ ma! be the best takeover option for beverage companies an0ious to corner a piece of "sia1s e0pan ing instant-coffee market& as long as the!1re willing to pa! up. 2he maker of 'uper 3offee sachets offers suitors establishe bran s an a istribution network across 'outheast "sia& sai +4B 5a! 6ian ,te. $apan1s 5irin 6ol ings 3o. *2507/ an 'untor! Beverage 8 9oo )t . *25:;/ are among logical bu!ers that ma! nee to offer at least <2.2 billion to convince 'uper1s foun ers to sell& sai =ala!an Banking Bh . 'uch a bi woul be the most e0pensive relative to net income for an! coffeemaker in "sia& accor ing to ata compile b! Bloomberg. .egional eman for foo an rinks has climbe with rising wealth& an no peer in evelope "sia has increase profit faster than 'uper in the past five !ears& the ata show. 'outheast "sia1s instant-coffee market is pro>ecte to e0pan 7: percent from last !ear to almost <4 billion in 201;& accor ing to -uromonitor ?nternational. 'uper @will efinitel! be one of the biggest beneficiaries of the increasing consumption&A $ames 5oh& an anal!st at =a!bank in 'ingapore& sai in a phone interview. @2he appeal here is !ou have a market lea er in its space an !ou imme iatel! get access to some ver! attractive markets.A 3an ! 3hng& a 'ingapore-base spokeswoman for 'uper& i n1t repl! to an e-mail seeking comment on potential bi s an i n1t answer calls to her mobile phone. 5an Bamamoto& a spokesman for 5irin& ecline to comment& as i 'untor! Beverage spokeswoman 2aCuko ?ke a.
#nstant Coffee
'uper& which sells 4wl-bran e coffee an instant cereal& owns factories from 3hina to =ala!sia& its website sa!s. Bran e pro ucts account for about %5 percent of the 2;-!earol compan!1s revenue& while foo ingre ients make up the rest& accor ing to 'uper1s most recent Duarterl! results. ?t1s unusual for instant coffee makers of 'uper1s siCe to control their raw materials an pro uction -- an that1s part of the compan!1s allure& accor ing to "lfie Beo& an anal!st at EB' (roup 6ol ings )t . in 'ingapore. @'uper offers an! potential bu!er soli bran s& an integrate ingre ients an manufacturing chain& an an e0tensive marketing reach in 'outheast "sia&A Beo sai in an e-mail. 2ok!o-base companies such as 5irin& 'untor! Beverage or "sahi (roup 6ol ings )t . *2502/ woul probabl! have to pa! more than '<5 a share to bu! or take control of 'uper& sai =a!bank1s 5oh. 2hat woul be at least a 7% percent premium to !ester a!1s closing price of '<7.%F. 'uper1s shares gaine 4.7 percent to close in 'ingapore at '<7.:5& the highest level since Gov. 11.
$%pensive Bi&
" '<5-a-share bi woul be value at '<2.;F billion *<2.2 billion/& or about 2F times anal!sts1 average estimate for net income this !ear. Go coffeemaker in "sia has ever fetche such a multiple& an the in ustr! me ian worl wi e is 1%& ata compile b! Bloomberg show. "ll the possible bu!ers name b! =a!bank have a histor! of targeting assets in 'outheast "sia. "sahi in 2011 lai out plans to bu! assets across 'outheast "sia as part of 2015 revenue goals& while 5irin faile in an effort to bu! the foo an rinks unit of 'ingapore1s 9raser 8 Geave )t . 2akuo 'oga& a spokesman for "sahi& ecline to comment when aske if the compan! woul be intereste in acDuiring 'uper.
Suntor' Beverage
'untor! Beverage& the maker of 4rangina an other soft rinks& sai last !ear that it was prepare to spen about <5 billion on eals. ?ts parent 'untor! 6ol ings )t . this week agree to bu! Beam ?nc.& which makes $im Beam an =aker1s =ark whiske!& for <1% billion.
'uper @is a ver! goo platformA for $apanese acDuirers& sai 5oh at =a!bank. @Bou have the istribution& !ou have the local know-how& an then on the $apanese si e& t!picall! the! have ver! strong pro uct research an evelopment.A "s eman for instant coffee in 'outheast "sia grows& consumption in =!anmar will e0pan at the fastest pace& accor ing to -uromonitor. 'ales in 2hailan an the ,hilippines are the highest in the region& -uromonitor ata shows. 'uper intro uce new bran e coffee pro ucts in the e0pan ing 3hinese market in "ugust. ?n a market ominate b! Gestle '" *G-'G/& eman for instant coffee in 3hina will surge 52 percent between 2012 an 201;& -uromonitor sai in =arch last !ear. -ven as freshl! groun brews gain popularit!& instant versions will account for F: percent of total 3hina sales in 201;& -uromonitor sai .
(rofit Growth
'uper generate average annual earnings-per-share growth of 21 percent in the past five !ears& accor ing to ata compile b! Bloomberg. 2hat beat 15 rinks makers in evelope "sia with a market value greater than <1 billion& inclu ing 5irin& 'ingapore1s Beo 6iap 'eng )t . *B6'/ an 3oca-3ola "matil )t . *33)/ in "ustralia& the ata show. 'uper1s profit ma! rise 11 percent in 2015 to '<10:.: million& accor ing to anal!sts1 forecasts compile b! Bloomberg. "n! foo an rinks compan! looking to improve its 'outheast "sian istribution -- a ifficult an time-consuming task -- coul consi er bu!ing 'uper& "n rew 3how& a 'ingapore-base anal!st at +4B& sai b! phone. ?n =!anmar& for e0ample& 'uper1s market share is as high as 50 percent& 3how sai in a report last month. ?n 3hina& its share is insignificant so far& he sai . Because 'uper e0pan e its bran e coffee in 3hina onl! in "ugust& sharehol ers ma! resist an! acDuirer before those efforts !iel results& 3how sai .
Appeasing Foun&ers
@2he! ma! not be that keen unless the price is reall! ri iculous&A he sai . @?f the! can gra uate from an ingre ients supplier in 3hina to a consumer-bran e supplier& there shoul be an argument for higher valuations.A 2he foun ers of 'uper are unlikel! to sell for a price as low as '<5 a share because the stock was near that level as recentl! as "ugust& 3how sai . 'uper1s shares have surge more than fivefol in the last four !ears.
3hairman an =anaging Eirector 2eo 5ee Bock& who pioneere 'uper1s combination of coffee& creamer an sweetener in one sachet& an two other foun ing irectors owne about 77 percent of the shares as of =arch 2017& accor ing to the compan!1s 2012 annual report. 'uper ma! be more likel! to bu! assets than be acDuire & sai Beo& the EB' anal!st. Earren 2eo& 2eo 5ee Bock1s son an the hea of corporate strateg! an business evelopment& sai in $ul! that 'uper was planning its first acDuisition in a eca e& looking for coffee makers with establishe bran s. 2hat ma! not stop bi ers pursuing 'uper to accelerate 'outheast "sian e0pansion& sai 3how at +4B. @?t1s not eas! to buil up istribution ver!& ver! Duickl!&A he sai . @2he attraction of 'uper (roup is their strong istribution an ecent bran ing.A 2o contact the reporter on this stor!: "ngus #hitle! in '! ne! at awhitle!1Hbloomberg.net 2o contact the e itor responsible for this stor!: 'arah .abil at srabilHbloomberg.net

Richest Coffee Takeover in Asia Seen With Super Group: Real M&A

Uploaded by

Copyright:

Available Formats

Richest Coffee Takeover in Asia Seen With Super Group: Real M&A

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Richest Coffee Takeover in Asia Seen With Super Group: Real M&A

Uploaded by

Copyright:

Available Formats

Bloomberg Businessweek

News From Bloomberg

You might also like