SINGAPORE Jan 21 Thailand's third-richest man
has raised his stake and takeover offer for Fraser and Neave Ltd
to fend off a bid by a group led by Indonesian tycoon
Stephen Riady as the battle for the Singapore property and
drinks group draws towards a close.
Thai billionaire Charoen Sirivadhanabhakdi appears to have
the advantage going into a formal auction that begins on Monday
to decide the fate of the 130-year-old company, which sold its
prized Tiger Beer brand to Heineken NV for S$5.6
billion ($4.56 billion) last year.
The Thai gambit values F&N at nearly $11.3 billion and puts
the pressure on a consortium led by Riady's Singapore-listed
property firm Overseas Union Enterprise Ltd to counter
the offer or withdraw from Southeast Asia's largest-ever
"This has extended Charoen's advantage. He has an upper hand
over OUE because he's only about 10 percent away from gaining
majority control of F&N," said Goh Han Peng, an analyst at DMG &
Partners Securities in Singapore.
Monday's auction was triggered because neither bidder had
declared a final offer by a deadline on Sunday set by
Singapore's Securities Industry Council.
Thailand's TCC Assets Ltd, headed by Charoen, raised its
offer last week to S$9.55 a share, above the S$9.08 bid by the
Overseas Union-led consortium. F&N shares rose 1.4 percent to
S$9.71 in early trade on Monday.
Charoen acquired an additional 90.8 million shares, or a 6.3
percent stake in F&N, at S$9.55 each on Friday and another 2.2
million shares on Saturday.
The move raised his total stake - held through TCC Assets
Ltd and Thai Beverage PLC - to 40.6 percent including
acceptances. Charoen's previous offer was S$8.88 per share.
The offers by Charoen and the Overseas Union group are
conditional on getting more than 50 percent of F&N. If Charoen
wins, F&N will have to pay a break fee of up to S$50 million to
the Overseas Union group.
DRINKS AND PROPERTY
F&N has a property portfolio worth more than S$8 billion and
soft drinks, dairy and publishing businesses. It sold Tiger Beer
to Dutch brewing giant Heineken in September.
F&N's independent financial advisor JP Morgan has said its
sum-of-the-parts valuation is S$8.58 to S$11.56 per share.
In the auction, each side can revise its offer by a minimum
of one Singapore cent per share once a day. The revision must be
unconditional and in cash.
The process will continue until neither side revises its
offer or the securities watchdog stops the auction.
Forbes says Charoen is worth $6.2 billion. His rival, Riady,
is also president of the Lippo group founded by his father
Charoen has extended the deadline of his previous offer
seven times and the Overseas Union group twice. The multiple
extensions have tested the patience of F&N shareholders.
Kirin Holdings Co Ltd, F&N's second-biggest
shareholder with a stake of around 14.8 percent, has given its
conditional support to the Overseas Union group.
The Japanese brewer will offer to buy F&N's food and
beverage business for S$2.7 billion if the Overseas Union
group's bid is successful. JP Morgan's valuation of that unit is
S$1.88 billion to S$3.82 billion.
If Charoen wins control of F&N, analysts say he is likely to
use F&N's distribution network in Singapore and Malaysia to sell
his other products and to market F&N brands in Thailand, where
he already has an edge.
($1 = 1.2277 Singapore dollars)
(Editing by John O'Callaghan and Neil Fullick)