FRASER & Neave's (F&N's) decision to give up its search for a new group chief executive (CEO) has again turned the spotlight on a possible break-up of the conglomerate.
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One reason the company has given for calling off the CEO search was the difficulty in recruiting a person who 'possesses all the necessary combined skill sets to realise the full potential' of its food-and-beverage and properties businesses. Rather than having one overarching head honcho, F&N has appointed three division chiefs to report to the board through a newly created chairman's office, with former SingTel chief Lee Hsien Yang staying on in his role as chairman.
If F&N thinks this move will end a long-running debate over its future business direction, it is mistaken. Such a move has only raised more questions.
As Singapore's 24th largest firm by market value, the company runs businesses that are not exactly small beer.
It jointly owns Asia Pacific Breweries (APB), brewer of Tiger Beer, with Dutch brewery giant Heineken International, and has 30 breweries in 12 countries.
F&N is also a major property developer, with luxurious condominium projects in Singapore, as well as in Britain and China.
So, it is not surprising to find traders already questioning the wisdom of its proposed management revamp.
Is it wise, for instance, to move Mr Koh Poh Tiong, a 23-year veteran in the brewery business, from APB, where he is currently the CEO to become F&N's food and beverage chief?
In his new role, Mr Koh will represent F&N's interests in APB and look after a division that includes well-known brands such as Magnolia and NutriSoy.
Eyebrows, however, were raised when APB said Mr Koh would be replaced by Mr Roland Pirmez, a manager from Heineken.
Granted that F&N's partnership with Heineken in APB goes back 76 years. Its effective interest of 39.7 per cent in APB, however, is smaller than Heineken's 41.9 per cent effective stake.
Surely, it would want its own man at APB's helm to look after a cash cow that produces annual revenues of $1.8 billion.
Some have argued that Mr Pirmez's appointment will not alter the status quo at APB, since he has to report to a board whose composition is determined by F&N and whose chairman, Mr Simon Israel, comes from Temasek Holdings, F&N's No. 2 shareholder.
Others, though, are not so sure.
They pointed out that Heineken had made no bones about its ambitions to expand in Asia, one of the world's fastest-
growing brewery markets, but was constrained from doing so directly by a 1931 agreement with F&N that required any expansion to be made through APB.
Things came to a head two years ago, when the two companies were embroiled in a legal spat over appointing a regional director for APB's China operations.
At one stage, the two firms were even competing on the open market to mop up as many APB shares as they could.
Observers said the tussle resulted in various defensive moves by F&N to fend off Heineken's postures. These included an invitation to Temasek to take up a 14.9 per cent stake in December 2006.
Surely, in the light of such developments, Mr Pirmez's APB appointment should be viewed as either both parties coming to an agreement on future cooperation or a prelude to F&N getting out of APB altogether.
Some have also argued that by having separate CEOs to run its various divisions, F&N will also be able to establish a track record for investors to value each business separately - and ascertain if the group is worth more if it is broken up.
Around the world, there are already plenty of examples of companies tearing themselves up and rewarding shareholders as a result. Old United States conglomerates such as AT&T and ITT Industries are just a few examples.
F&N's management revamp may well herald a further corporate action by the group.
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