* Thai group offered S$9.60 to buy 10 pct of F&N to
* Citi was trying to broker the deal that was launched
* Charoen expected to raise bid next month-sources
By Saeed Azhar
SINGAPORE, Dec 17 Thai beer baron Charoen
Sirivadhanabhakdi tried and failed to acquire an additional
stake of 10 percent in Fraser and Neave Ltd (F&N), piling
pressure on him to raise his earlier $7.2 billion takeover bid
for the Singapore conglomerate.
Charoen, whose Thai Beverage PCL and TCC Assets
Ltd own a combined 34 percent of F&N, is trying to
increase his stake in F&N to more than 50 percent by next month,
when his takeover bid for the 129-year-old beverage and property
Talks between companies controlled by Charoen and
institutional investors in F&N began late on Friday with
Citigroup Inc trying to broker a deal, and the
negotiations have since broken down, sources with direct
knowledge of the transaction told Reuters. The sources declined
to be identified as the discussions were confidential.
"It was a disaster," said one of the sources. "It is back to
the drawing board."
The Thai billionaire in September offered to buy F&N shares
that he did not already own for S$8.88 apiece, which F&N's
independent financial adviser described as "not compelling
In November, a bidding war unfolded when a group led by
Singapore-listed Overseas Union Enterprise placed a
competing offer of S$9.08 a share for F&N.
Shares in F&N have consistently traded above the two bids,
edging up 0.21 percent to S$9.65 in late morning trade on
"Investors are buying time, there's nothing to lose," said
Ng Kian Teck, lead analyst at SIAS Research in Singapore.
"There's still an ongoing bidding war, so you never know if OUE
will come up with a price higher than S$9.60."
Since the original Thai offer in September, the market value
of F&N has risen more than 13 percent to $11.4 billion,
reflecting investor expectations that the Thais would raise
their bid or a rival offer for the Singapore group would emerge.
"We continue to maintain our stance that the shares offer
value even above S$10/share," Religare Capital Markets said in a
The potential stake sellers included at least two Hong
Kong-based hedge funds, which rejected the Thai deal of S$9.60 a
share, sources said. It was not clear why the funds backed off.
Had the bid for a further 10 percent, made by a group linked
to Charoen, been successful, it would also have forced the Thais
to raise their existing bid for F&N under Singapore rules.
The Thais' current takeover offer for F&N, which expires on
Jan. 2, is likely to be extended to the fourth week of January
when it will have to revise its current offer, sources said.
"Shareholders should note that unless a formal announcement
is made, there is no certainty that any transaction would
materialise and/or any revision of the offer price would be
made," Charoen's TCC Assets said in a statement.
A Citigroup spokesman in Hong Kong declined to comment.
F&N's board is expected to consider a report from its
independent financial adviser JPMorgan by Thursday on
the rival S$13.1 billion bid from the Overseas Union group.
Nomura said in a note earlier this month that it expects the
Overseas Union consortium may be prepared to bid up to S$9.88
per share for F&N.
F&N shares have surged more than 50 percent so far this
year, outperforming an 18 percent gain in the benchmark Straits
F&N has property assets worth more than S$8 billion ($6.55
billion) as well as soft drinks and printing businesses.