* Lee Hsien Yang oversaw bidding war for Singapore
* Lee weighing his options after SE Asia's biggest M&A deal
* Lee to make more than $500,000 profit if he sells his F&N
shares to Thais
By John O'Callaghan and Saeed Azhar
SINGAPORE, Jan 28 Lee Hsien Yang, the brother of
Singapore's prime minister and chairman of Fraser and Neave Ltd
(F&N), will enter a new chapter in his corporate life - and
could well leave F&N - as the group looks set to be taken over
by Thailand's third-richest man.
Lee, 55, the second son of Singapore's founding leader Lee
Kuan Yew, oversaw a bidding war for F&N that led to
Southeast Asia's biggest corporate takeover. The deal values the
130-year-old drinks and property conglomerate at around $11
billion and will reward shareholders handsomely.
Despite some friction with Lee's board, there are compelling
reasons for Charoen Sirivadhanabhakdi to keep on the astute,
well-connected scion as the Thai beer baron looks to unlock
value from F&N's drinks business, distribution networks and
"He will leave F&N - that's my sense," said Mano Sabnani, a
minority shareholder and former senior executive at a Singapore
newspaper. "If they wanted him and they asked him then maybe.
But Hsien Yang is a very capable chap. For him to get other
roles is not a problem."
Lee's future is sure to be a hot topic at a shareholder
meeting on Tuesday.
Lee holds 180,000 F&N shares directly, a company filing
showed in December, and he is one of three trustees of 408,240
shares held by the estate of Kwa Siew Tee. Kwa is the late
father-in-law of Lee Kuan Yew.
Another filing from 2007 shows Lee Hsien Yang bought the
direct shares on Nov. 23 of that year at S$5.65 each. At the
Thai takeover price of S$9.55 per share, he will make a profit
of S$702,000 ($571,600) if he sells to the Thais.
If Lee does leave F&N, the impact will be minimal as the
senior management is intact and the business carries on, said a
source close to the transaction, speaking on condition of
"I'm sure he's considering his options," said the source.
"Fraser is a very old brand, so the connections are all there,
the management are all there. The business is beyond one
In 2007, Lee surprised the region's corporate world, and his
father, with his departure from Singapore Telecommunications Ltd
after 12 years as its chief executive.
Lee, who is also chairman of the Civil Aviation Authority of
Singapore and a director of bourse operator Singapore Exchange
Ltd and Australian and New Zealand Banking Group Ltd
, declined to comment or be interviewed.
"He would be one of the sought-after global CEOs, but the
question is whether he would like to leave Singapore," said a
senior investment banker. "His wife is one of the best lawyers
in town... They are a power couple."
Lee's wife Lee Suet Fern is a senior director at Stamford
Law Corp, F&N's main legal advisor on the takeover deal by the
Thais and the group's sale of its prized Tiger Beer asset to
Heineken NV in September.
A SPRINT FORWARD
Lee streamlined F&N's management by naming two CEOs to run
the drinks and property divisions as it was difficult to find
one person good at both market segments, said Jit Soon Lim,
Nomura's head of equity research for Southeast Asia, who has
covered F&N since 1997.
"The question is not so much where he ends up but what he
wants to do," said Lim. "If F&N is fully privatised, then there
is no role for him as a chairman."
F&N's board was exploring options to restructure the group
and unlock value even before Charoen's interest accelerated the
process, but it would have taken time and carried some risks to
execute, said another source who is close to the transaction.
"Here it's a sprint forward, there's certainty and
time-value for money," said the source.
"We should not underestimate the contribution of the
chairman in this process," the source said. "The value has been
realised and the new owner - who has got more money than you
know what to do with - has to decide which is his best team."
A spokesman for both TCC Assets Ltd and Thai Beverage PCL
, through which Charoen is buying all of the F&N shares
that he does not already own, declined to comment on their plans
for the Singapore conglomerate.
Charoen and Lee have been in close contact, but relations
have not always been smooth since the Thai magnate lost out to
Heineken and turned his attention to F&N itself.
Last year, Lee played the role of mediator as Charoen's
battle with Heineken over Asia Pacific Breweries Ltd
risked turning ugly, taking a call from the Thai billionaire in
mid-September, sources close to the deal have said.
After that conversation, Charoen called Heineken to say his
group would accept the Dutch giant's bid to buy F&N and other
shareholders out of the Tiger beer maker, leaving the Thais to
go after F&N's soft drinks and property businesses.
But Charoen shot down the F&N board's proposal to pay S$4
billion to shareholders as he prepared to bid for control.
The board's decision to agree to a break fee for a rival
bidder - a consortium led by Indonesian tycoon Stephen Riady's
Overseas Union Enterprise Ltd - also did not sit well
with the Thais, two sources with direct knowledge of the matter
Lee, who was paid S$1.59 million last year, heads a
nine-member F&N board that is a diverse group of powerful
They include Hirotake Kobayashi, managing director of
Japanese food and drinks company Kirin Holdings Co Ltd,
which owns about 15 percent of F&N and backed the Riady-led
Other prominent F&N board members are Timothy Chia, the Asia
chairman of Coutts & Co Ltd, Tan Chong Meng, group chief
executive of PSA International, one of the world's largest port
operators, and Maria Mercedes Corrales, a former senior
executive at Starbucks Coffee Co and Levi Strauss & Co in Asia.
The current board could be embraced by Charoen, minority F&N
shareholder Sabnani said, "but my feeling is there are going to
be major changes."
($1 = 1.2281 Singapore dollars)
(Additional reporting by Eveline Danubrata and Anshuman Daga in
SINGAPORE and Khettiya Jittapong in BANGKOK; Editing by Ryan