Reaching for a cold one
Singaporean soft drink giant Yeo's has everything a potential buyer might desire - but its family owners are playing coy
Yeo Hiap Seng would be among the most alluring targets in Asia's booming drinks market if it were not for the Singaporean company's controlling family.
Its sales of soya milk, chilled melon tea and other products are worth US$1.15 billion a year, its profit has more than doubled in the past two years, and its rivals including Suntory Beverage and Food are seeking food and drinks assets in emerging markets. The biggest hurdle to any deal might be the Ng family, which had rebuffed bids for its majority stake in Yeo's, said people familiar with such approaches.
Even after stock-price gains since the global financial crisis, Yeo's trades at a cheaper valuation relative to its cash flow than most Asian peers. While the family may resist selling at such levels, there still might be interested buyers, Malayan Banking said.
"They have great distribution, a household name and revenue growth," said Singapore-based IG Asia analyst Kelly Teoh. "There aren't many household names left that have very strong branding and a story to go with it."
Whether [they] would sell is another story. They don’t need the money
Founded by Yeo Keng Lian in 1900, the company first sold soya sauce from a shop in Zhangzhou, Fujian. After moving to Singapore in 1935, the business expanded and Yeo's products now include soya milk, chrysanthemum tea and canned chicken curry.