Capital Calls: Asian beer IPO lacks liquid courage

BITTER TASTE. Spirits maker and brewer Thai Beverage (TBEV.SI) dropped plans for a $2 billion spinout of its beer business, citing market uncertainty and Covid-19 outbreaks. Dealing with a record caseload, Thailand shut bars read more at the weekend even though Vietnam, Thai Bev’s crown jewel growth market, is coping well. Most market valuations also have changed little since the initial public offering was unveiled in February. A better explanation for the abandoned deal is that the pandemic dashed chances for a frothy valuation.

Peers Budweiser Brewing Company APAC (1876.HK), Heineken (HEIN.AS) and Kirin (2503.T) trade on a blended 27 times forecast earnings, which would have valued the straightforwardly named BeerCo at $8 billion. Selling 20% for $2 billion required a multiple closer to the 40 times fetched by Bud, which was always going to be a stretch. BeerCo’s 7% net margin, while improving, is merely half that of its formidable rival. (By Jennifer Hughes).

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