Sold F&N

I've just read through the Crcular to Shareholders from F&N dated 6 Sept 2012.

Many whould have known that F&N has agreed to sell its shares in APB to Heineken @ $53.00 per share.
This would amount to a net gain of $4,770 million for F&N Group.

Seems good? Well, look again at the net profits attributable to the Sale Interests, which amount to $331 million or 48.2% of the Group's 9-month net profits, or 36.1% of its FY estimated net profit. As such, there will be a drastic 36.1% drop in profits from here on....

The board intends to distribute approximately $4.0 billion, representing approximately 84% of the gain on disposal by way of capital reduction. What they will do is cancel 1 share for evey 3 shares held by shareholders (rounded down to nearest 10 shares), and paying $8.50 per share for the cancellation.

This would mean that I will lose a third of my shares but gain $8.50 per share for each share cancelled.

According to the circular, after the proposed transaction and capital reduction, the NAV per share will rise from $4.94 to $8.37, EPS will also rise from $0.457 to $0.595 before adjustment. However, I believe the earnings growth potential will be greatly hampered without APB. Prior to the sale of APB, my conservative intrinsic value of F&N was $8.60, and since it hits $8.60 today, I sold all my F&N shares @ $8.74 for a 240.94% profit. Granted the improved EPS and NAV/share values, the outlook of F&N don't look as good to me now.

Will continue to put it in my watchlist. Meanwhile, I'm searching for more wonderful companies at valuable prices.

Cheers and God Bless