SINGAPORE/AMSTERDAM Heineken NV (HEIN.AS) raised its offer for Fraser and Neave's (FRNM.SI) stake in the maker of Tiger beer to $6.35 billion on Friday, seeking to fend off a Thai rival for control of a leading brand in the fast-growing Southeast Asian market.
The Dutch brewer confirmed an earlier Reuters report late on Friday night when it made a revised offer for Asia Pacific Breweries (APB) APBB.SI of 53 Singapore dollars per share. It had previously bid S$50 per share, while a Thai billionaire's group made a partial offer of S$55 per APB share.
Heineken, the world's third-biggest brewer, is seeking control of Asia Pacific Breweries to gain a larger slice of one of the last beer markets that is still growing rapidly.
But Heineken's efforts have been complicated by Charoen Sirivadhanabhakdi, Thailand's second-richest man, who wants to expand his Thai Beverage (TBEV.SI) empire in Southeast Asia.
Heineken's offer for the APB shares owned by drinks and property conglomerate Fraser & Neave (F&N), its long-time partner, would give it a total 81.6 percent stake and trigger a general offer for the rest of APB.
"I am pleased that F&N's board has agreed that our increased offer, which is now final, represents excellent value for F&N and APB shareholders," Heineken's chief executive, Jean-François van Boxmeer, said in a statement.
"Our Asian headquarters will continue to be based in Singapore, and we remain 100 percent committed to the growth and success of APB and the Tiger brand."
Heineken said F&N's board had agreed to recommend the deal to its shareholders and not to "solicit, engage in discussions or accept any alternative offer or proposal" for its interests in APB.
ThaiBev recently became F&N's largest shareholder with 26.4 percent. Charoen's son-in-law, through his group Kindest Place, separately offered to buy F&N's direct 7.3 percent stake in APB at S$55 per share.
"Heineken's resolve to win APB seems to be very strong," said Andrew Chow, head of research at UOB Kay Hian in Singapore.
"APB has an extensive distribution network and breweries. Its Tiger brand is also strong in Asia."
The Thais have said they want to work with Heineken, but sources close to the situation say it would not be keen to cooperate with a competitor.
"Heineken wants full control of Asia Pacific Breweries, while Charoen wants a piece of that growth and is positioning himself to gain handsomely if Heineken wants to buy him out in the future," said an investment banking source in London.
APB has had nearly 20 percent annual earnings growth over the last decade.
The biggest brand APB brews is Heineken itself, accounting for 30 percent of its volume, but it also makes Tiger, Bintang and Anchor and runs 30 breweries in countries including Singapore, Malaysia, Indonesia, Vietnam, Thailand and Cambodia.
Among Southeast Asian brewers, APB is the sixth-largest in terms of sales across the Asia Pacific region, behind San Miguel Corp (SMC.PS) of the Philippines in number one spot and ThaiBev in fourth, according to Euromonitor's latest data for 2011.
Heineken had said its final offer of S$53 a share represented a premium of 54 percent over the one-month volume weighted average price per APB share.
Trading of APB and F&N shares in Singapore was suspended on Friday pending an announcement.
ABP shares have jumped from under S$35 in mid-July before stake building began to S$50.57 at Thursday's close. F&N shares, meanwhile, have risen from S$7.40 since mid-July to end at S$8.40 on Thursday. Both have hit record highs in recent weeks.
The Heineken deal could prompt a breakup of F&N with Coca-Cola (KO.N) keeping an eye on its popular soft-drink 100PLUS, fruit juices, mineral water and dairy products unit, which could be hived off from the Singapore group's property assets.
Goldman Sachs (GS.N) is advising F&N, while Citigroup (C.N) and Credit Suisse CSGN.VX are advisers to Heineken. Morgan Stanley (MS.N) and HSBC (HSBA.L) are advising the Thais.
(Writing by Sara Webb and John O'Callaghan; Additional reporting by Denny Thomas in HONG KONG, David Jones in LONDON, and Sara Webb in AMSTERDAM; Editing by Matthew Tostevin, Bernard Orr)