* F&N gets 54.3 pct vote for capital reduction plan, below
required 75 pct
* F&N says will consider other ways to give funds to
* APB sale to Heineken had become formality after agreement
* F&N shares down 0.2 percent, below the Thai offer
* Heineken shares up 1.2 pct
By Eveline Danubrata and Philip Blenkinsop
SINGAPORE/BRUSSELS, Sept 28 Heineken NV
won full control of the maker of Tiger beer in a S$7.9
billion ($6.4 billion) deal on Friday, ending a two-month battle
aimed at strengthening the Dutch brewer's position in
fast-growing Asian beer markets.
Shareholders of Singapore conglomerate Fraser and Neave Ltd
(F&N) backed the sale of their stake in Asia Pacific
Breweries (APB) to the world's third largest brewer.
Their vote ended the battle between Heineken and companies
linked to Thai billionaire Charoen Sirivadhanabhakdi for control
of APB, which operates 30 breweries across 14 countries from
Mongolia to New Zealand.
The spotlight is now on a $7.2 billion bid by Charoen for
the rest of F&N, through Thai Beverage PCL and TCC
Assets Ltd. The Thais control 30.7 percent of F&N, which will
remain a large player in property and soft drinks.
Heineken, which already owned nearly 56 percent of APB
through an 81-year-old venture with F&N, had sought full control
of the brewer to ward off the advances of Charoen, whose
family's companies became F&N and APB shareholders in July.
The Dutch brewer said the average financing costs for its
purchase were expected to be less than 3 percent a year. It gave
no details of possible cost savings and said the rationale for
the deal was more the promise of revenue growth.
Heineken Chief Executive Jean-Francois van Boxmeer said the
deal would boost the company's exposure to two of the
fastest-growing regions for beer in the world - Southeast Asia
and the Pacific Islands, and China.
Brewing research group Plato Logic forecast the Southeast
Asia and Pacific Islands market would grow by an average 4.8
percent per year to 2020 - faster than Africa, Latin America and
Heineken will focus on higher margin premium brands such as
Heineken, Tiger and Anchor, for which growth was forecast at 8
percent per year in Southeast Asia and 12 percent in China, and
push Tiger into other markets, including Europe.
Heineken shares were up 1.2 percent at 1110 GMT, making them
the second-strongest in the STOXX European food and beverage
THAI BATTLE CONTINUES FOR F&N
While the Thais gave their approval for the APB sale, they
voted down a proposal by F&N's board to pay out S$4 billion
($3.3 billion) to shareholders via a capital reduction.
The motion required 75 percent support but got only 54
percent. Excluding the Thai votes, 91 percent of shareholders
voted in favour, according to an F&N spokeswoman.
"ThaiBev/TCC could use the capital to fund acquisitions to
grow F&N's business, or to make distributions which may be more
amenable to ThaiBev/TCC," Deutsche Bank analyst Gregory Lui said
in a client note.
By keeping the S$4 billion within F&N, the Thais would also
make it more expensive for a third party to launch a counterbid
for the conglomerate, other analysts and bankers said.
The Thai group's S$8.88 per share offer for the rest of F&N
expires on Oct. 29. F&N shares were down 0.1 percent at that
level after a trading halt was lifted.
Japan's Kirin Holdings Co Ltd, F&N's second-biggest
shareholder, was considering options including a sale of its 15
percent stake, but was still holding out for a potential higher
price, banking sources said.
The Japanese brewer said previously it was interested in
F&N's food and non-alcoholic drinks business.
In a meeting attended by more than 500 shareholders,
activist Mano Sabnani described the Thai offer as "lacklustre".
"My view is the breakup value of F&N is about S$10 and I
think most analysts would agree with me," Sabnani said to the
applause by some shareholders at the meeting in an
air-conditioned tent set up near F&N's office.
F&N officials told shareholders, including two units of
British insurer Prudential PLC, that the conglomerate
would seek to expand its other businesses after the sale of APB.
F&N is the leader in the soft drinks markets in Singapore
and Malaysia, with a 24.5 percent and 26.9 percent market share,
respectively, according to Euromonitor. But F&N's reach in the
rest of the region is weak and its Asia-Pacific market share is
only 0.3 percent.
F&N's property portfolio, worth more than S$8 billion, has
also attracted the interest of Blackstone Group LP and
global property companies, sources have told Reuters, while the
beverage business could appeal to potential suitors such as