--Femsa in no hurry to decrease large Heineken stake
--Stake valued at $6.6 billion, above valuation in 2010 sale
--Equity position added $240 million to Femsa net profit this
year
By Amy Guthrie
MEXICO CITY--Mexican beverage and retail company Femsa SAB (FMX,
FEMSA.MX) isn't likely to start flooding the market with Heineken
shares come April, as permitted under the terms in which Femsa
agreed to sell its beer business to the Dutch brewer in 2010.
Both as an investor and board member of Heineken, Femsa needs to
take a "long-term view" on the brewer, Femsa Chief Financial
Officer Javier Astaburuaga told investors during a conference call
Thursday.
Femsa's 20% stake in Heineken, via shares of Heineken NV (HINKY,
HEIA.AE) and Heineken Holding NV (HEIO.AE), contributed 3.10
billion pesos ($240 million) in net profit to Femsa's balance sheet
during the first nine months of 2012, 12% more than in the same
period of 2011.
The Heineken stake supplied about 20% of the company's MXN15.87
billion in consolidated net profit in the January-September period
of this year.
Mr. Astaburuaga said that looking back, the company feels "very
good" about its decision to swap the beer business for a large
equity position in Heineken. Femsa will continue to assess the
business and the investment's performance to determine what's best
for Femsa shareholders, he said.
Although Femsa will be able to start "disposing" of some of its
Heineken shares next year, Mr. Astaburuaga said that market
observers shouldn't view April as a "critical date" for the
company, saying that any selling of Heineken shares would have to
be undertaken as part of a "thoughtful process" and with great
discretion.
Femsa's Heineken stake is worth around $6.6 billion at current
market prices, estimates Credit Suisse analyst Antonio Gonzalez,
who ventures that Femsa doesn't have any immediate opportunities to
allocate such a large chunk of cash in either its soft drink or
convenience store businesses.
At the time of the deal, Heineken pegged the value of Femsa's
Heineken stake at $5.5 billion.
Starting in April, Femsa will be able to sell up to 1% of
outstanding Heineken shares per quarter, should it choose to do so,
Mr. Gonzalez said. The Credit Suisse analyst suggested that Femsa
could also face a large tax hit if it opts to divest Heineken
shares and then allocate some of those proceeds to shareholders in
the form of dividends.
-Write to Amy Guthrie at amy.guthrie@dowjones.com