The Asian primary markets were treated to an unusual equity deal on Wednesday when Siam Commercial Bank offered $296 million of notional principal in Thai Beverages through a European-style warrants placement.
Kindest Place Groups, a non-afiliated special purpose vehicle, was the issuer of the warrants. SCB was the secondary seller of the warrants, according to a source close to the deal.
Thailand’s oldest bank offered a total of 534.3 million warrants on the basis of one warrant per share. Pricing was fixed at $0.02328.
The exercise price has been fixed at S$0.9941/ $0.72996, representing a 31.7% premium to ThaiBev’s closing price of S$0.755 on July 22 in Singapore and based on a fixed US – Singapore dollar exchange rate of $1.00:S$1.36190, according to a term sheet seen by FinanceAsia.
The US dollar-denominated warrants have a three-year tenor, maturing on July 28 in 2018.
ThaiBev shares have never reached this level. In April this year, they touched an all-time high of S$0.79 before dropping back 4.5% at Wednesday’s close.
The warrants were placed with dividend protection of Bt0.61 per share, which implies an effective yield of around 3.18%.
To facilitate hedging, the bookrunner, Bank of America Merrill Lynch, entered into stock lending arrangements with the issuer, enabling investors to borrow stock for arbitrage purposes.
Most of the investors are believed to have been hedge funds with the deal backed by one large anchor order.
ThaiBev was founded in 2003 by Charoen Sirivadhanabhakdi, the second richest Thai citizen with an estimated net worth of $12.6 billion, according to Forbes. The tycoon is also the owner of Singapore food and beverage company Fraser and Neave (F&N), having privatized it via a $7.1bn cash deal in 2012.
ThaiBev produces and sells beer, spirits and other non-alcoholic beverages as well as frozen seafood. It owns and operates 18 distilleries with a total annual production capacity of approximately 819 million litres, according to its website
Shares of ThaiBev have been on an upward swing since acquiring F&N. They have nearly doubled since then and are trading near its all-time high of S$0.79.
The stock ended down 1.95% at S$0.755 Wednesday, at a valuation equating to 21.8 times historical 2014 earnings.
The warrants will be listed on the Open Market of the Frankfurt Stock Exchange.
Due to conflicting accounts provided by parties to this deal and possible inaccuracies in relevant documents, an earlier version of this article contained errors related to the ownership of Kindest Place Groups and the premium placed on the price of the warrants.