October 23, 2012 / 4:56 AM / 5 years ago

UPDATE 1-OUE taps Credit Suisse to advise on Fraser and Neave bid-sources

* OUE may have to raise more than the Thais for F&N bid -source

* OUE trying to muster support from Japan’s Kirin and other parties

* Thai tycoon likely to extend Oct 29 deadline for bid -sources

By Saeed Azhar and Janeman Latul

SINGAPORE/JAKARTA, Oct 23 (Reuters) - OUE, a property firm controlled by Indonesia’s Lippo Group, has hired Credit Suisse as an adviser and is trying to raise billions in loans to challenge a $7.2 billion bid for Singapore conglomerate Fraser and Neave, sources said.

The move by Overseas Union Enterprises (OUE) is likely to force a group linked to Charoen Sirivadhanabhakdi, Thailand’s third-richest man, to extend an Oct. 29 deadline for its F&N bid and consider raising its buyout offer of S$8.88 per share.

F&N shares are already trading 4 percent above the Thai offer. Thai Beverage and Charoen’s investment vehicle, TCC Assets, collectively own nearly 34 percent of the drinks and property group.

The fight for F&N’s businesses has shifted to the group’s property portfolio, worth more than S$8 billion ($6.56 billion), after F&N agreed last month to sell its nearly 40 percent stake in Tiger beer maker Asia Pacific Breweries Ltd to Heineken NV.

“OUE will have to raise more than the Thais,” said a source with direct knowledge of the matter. “Given the expected size of this (deal), there will be a number of banks involved.”

An OUE spokeswoman declined to comment. A Hong Kong-based spokesman for Credit Suisse also declined to comment.

The Thai group had lined up loans of S$11.8 billion ($9.66 billion) to bid for F&N, Reuters Basis Point reported, initially raising funds to buy a 22 percent stake and raising more from bridge loans to bid for the entire firm.

OUE is trying to win support from Japan’s Kirin Holdings , which owns 14.9 percent of F&N, and other parties for its bid for F&N, sources previously told Reuters.

“OUE doesn’t have so much power to take over the whole of FNN, looking at their balance sheet currently,” Ng Kian Teck, lead analyst at SIAS Research. “They could buy over a part of F&N, or partner with another party who would be keen on the beverages business.”

OUE’s move comes less than two weeks after F&N’s board rebuffed its S$1.4 billion offer for the group’s hospitality and serviced apartments business


A full bid for F&N, which has a market capitalisation of about $11 billion, would stretch OUE’s finances.

OUE has a market capitalisation of just $2.3 billion and had a debt-to-equity ratio of 0.70 at the end of 2011, compared with the Singapore industry average of 0.32, according to Thomson Reuters data.

However, OUE’s controlling shareholder, Lippo Group, has about $11 billion in assets and operates private and public companies in China, Indonesia, the Philippines, Singapore and South Korea.

OUE interest is limited to F&N’s estimated S$8.7 billion property portfolio. Partnering with Kirin could allow it to sell the beverage business to the Japanese company.

A person with direct knowledge of the matter told Reuters that Kirin is only interested in the food and soft drinks business of F&N, the value of which is mainly locked up in its Malaysian-listed entity.

Coca-Cola is also interested in F&N’s soft drinks unit, which sells the popular soft-drink 100PLUS, fruit juices, and mineral water in the event they are hived off from the Singapore group’s property assets.

OUE is exploring the sale of a hotel cum retail complex in the prime Orchard Road shopping belt in downtown Singapore for about S$1.7 billion ($1.4 billion), a newspaper reported last month.

Standard Chartered said in a research note that OUE could become Singapore’s largest-listed landlord and residential developer.

“We expect the successful control of F&N by OUE and partners to result in a break-up of F&N’s property, beverages and publishing businesses,” Standard Chartered analysts said in the note.

Morgan Stanley is advising the Thai group, while Deutsche Bank is advising Kirin.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below