Charoen group fails in bid to boost F&N stake: sources

SINGAPORE Mon Dec 17, 2012 8:17am EST

Stacks of Fraser and Neave (F&N) products are on display at its factory in Pulau Indah outside Kuala Lumpur December 4, 2012. REUTERS/Bazuki Muhammad

Stacks of Fraser and Neave (F&N) products are on display at its factory in Pulau Indah outside Kuala Lumpur December 4, 2012.

Credit: Reuters/Bazuki Muhammad

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SINGAPORE (Reuters) - Thai beer baron Charoen Sirivadhanabhakdi has failed in a bid to increase his stake in Singapore's 129-year-old beverage company Fraser and Neave Ltd (FRNM.SI), two sources said.

Talks between the Thai group and institutional investors began late on Friday with Citigroup trying to broker the deal, sources with direct knowledge of the transaction told Reuters. The sources declined to be named as the talks were not public.

The potential sellers included at least two Hong Kong-based hedge funds which rejected the Thai deal, sources said. It was not clear why the funds backed off.

A Citigroup spokesman in Hong Kong declined to comment.

Charoen has been locked in a bidding war since September against a group led by Overseas Union Enterprise (OVES.SI) and its chairman Stephen Riady who is also the president of Indonesia's Lippo group of companies.

The Thai group already owns 34 percent of F&N includes Thai Beverage (TBEV.SI) and TCC Assets, Charoen's investment vehicle.

This latest stake building attempt at S$9.60 a share would have taken Charoen's holding above 44 percent, making it difficult for any rival bidder to upstage him.

Had the bid for a further 10 percent, made by a group linked to Charoen, been successful, it would also have forced it to raise its existing $7.2 billion or S$8.88 a share for F&N.

One source with direct knowledge of the matter said: "Because they didn't buy any shares, they didn't have to make a revised offer," said one of the sources.

The Thais current takeover offer for F&N which expires on Jan 2 is likely to extended, sources said.

The Thai group said in a statement: "Shareholders should, note that unless a formal announcement is made, there is no certainty that any transaction would materialize and/or any revision of the offer price would be made."

F&N shares have surged more than 50 percent so far this year, outperforming an 18 percent gain in the benchmark Straits Times Index .FTSTI.. On Monday, they edged up 0.6 percent to close at S$9.63.

Morgan Stanley (MS.N), the financial adviser for Charoen's TCC Assets and Thai Beverage, had advised the Thai group not to do the transaction, one of the sources said.

Morgan Stanley could not be immediately reached for comment.

F&N has property assets worth more than S$8 billion ($6.55 billion) as well as soft drinks and printing businesses.

(Reporting by Saeed Azhar and Eveline Danubrata; Editing by Anshuman Daga and Mike Nesbit)

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