Shares of Fraser and Neave Ltd 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 $500 million — sparked an early rally of as much 5.2 percent in F&N’s shares.
“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.
Thai Beverage PCL, which owns 28.5 percent of Singapore-based F&N, will become a “regional consumer powerhouse with Starbucks, KFC, Chang beer and Thai spirits under its belt,” he said.
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 40 percent of its annual revenue in Malaysia.