--Thai Beverage, TCC Assets make general offer for Fraser &
Neave
--Move by Thais may upset Heineken's bid to buy F&N's stake
in Asia Pacific Breweries
--ThaiBev, TCC Assets offer values Fraser & Neave at US$10.2
billion
(Updates with Heineken comment, Fraser & Neave share
status)
By P.R. Venkat
Companies linked to Thailand tycoon Charoen Sirivadhanabhakdi
made a takeover offer Thursday to buy all of Fraser & Neave
Ltd. (F99.SG), valuing the Singapore-based conglomerate at 12.53
billion Singapore dollars ($10.2 billion), a move that could upset
Heineken NV's (HEIA.AE) plans to gain control of F&N's stake in
beer maker Asia Pacific Breweries Ltd. (A46.SG).
In a filing to the Singapore Exchange, Thai Beverage PCL
(Y92.SG) and its partner, TCC Assets, said it is making a mandatory
general offer for the whole of F&N as their stake in the
company has exceeded the 30% threshold. Under Singapore laws, that
threshold automatically triggers a full takeover offer.
Together, ThaiBev and TCC Assets, controlled by billionaire Mr.
Charoen, now have a 30.36% stake in the Singaporean conglomerate
that has businesses in beer, property, soft drinks and
publishing.
The Thailand companies have made an offer to pay in cash S$8.88
a share (about $7.24) to buy all the F&N shares they don't
already own. This would mean that Mr. Charoen's entity would have
to spend close to another S$9 billion to gain full control of
F&N.
"We believe the offer represents an opportunity for F&N
shareholders to realize the value of their investment in cash and
to make a complete exit from F&N," Thapana Sirivadhanabhakdi,
president and chief executive of ThaiBev and son of Mr. Charoen,
said in a prepared statement.
ThaiBev's latest move comes as shareholders of F&N are set
to meet Sept. 28 for a vote to approve Heineken's bid to buy
F&N's entire 39.7% stake in Asia Pacific Breweries. Last month,
the board of the Singaporean conglomerate had agreed to recommend
Heineken's sweetened US$4.5 billion offer to shareholders.
For Heineken, gaining full control of Asia Pacific Breweries is
part of the Dutch brewer's strategy to consolidate its position in
the fast-growing Asia beer market and significantly boost its
exposure to high-growth, developing economies at a time when it is
struggling with weakness in Europe.
Heineken said in a statement Thursday it has noted ThaiBev's
announcement and "will review the content carefully" and "make a
further announcement if and when appropriate."
A full control of Asia Pacific Breweries would see Heineken
owning the Tiger and Bintang APB beer brands that have nearly 50%
of the beer market in Indonesia, Malaysia and Singapore, according
to data provider Euromonitor. Asia Pacific Breweries has 30
breweries and 40 brands spanning 14 Asian countries. It also brews
Heineken beer for some markets in the region.
F&N and Heineken share an 81-year-old, 50-50 joint venture
that owns 64.8% of Asia Pacific Breweries. F&N also owns a 7.3%
direct stake in Asia Pacific Breweries, while Heineken directly
owns 13.94% of the company after acquiring shares from the market
in recent weeks.
Heineken needs a simple majority of F&N shareholders to vote
in favor of its offer for Asia Pacific Breweries, and the latest
move by Mr. Charoen would upset the Dutch brewer's plans given the
Thais are the single largest shareholder of F&N.
Worries that Mr. Charoen may move to block Heineken's bid for
Asia Pacific Breweries surfaced Tuesday when ThaiBev said that it
along with a partner was looking to make a full offer for F&N.
Thursday's announcement by ThaiBev and TCC Assets is likely to
unsettle Heineken more given that the Dutch brewer has been eyeing
to take full control of Asia Pacific Breweries for the last two
months. Heineken had first offered to pay S$5.3 billion for
F&N's entire 39.7% stake in Asia Pacific Breweries in July and
raised the offer to S$5.6 billion last month in a bid to keep rival
bidders at bay.
Analysts have said that F&N is a strategic fit for Mr.
Charoen's businesses, whose interests range from selling beer and
spirits to property development, to selling fruit juices, bottled
water and insurance.
"Depending on the outcome of the offer, ThaiBev in conjunction
with the offeror [TCC Assets] may have the benefit of exercising
greater influence over F&N," ThaiBev said in the statement.
The S$8.88 a share offer by ThaiBev and TCC Asset is a 4.3%
premium to F&N's share closing price of S$8.51 Wednesday.
F&N officials weren't immediately available for comment.
Shares of the conglomerate were placed in a trading halt early
Thursday pending an announcement.
-Robin Van Daalen in Amsterdam contributed to this report
Write to P.R. Venkat at venkat.pr@dowjones.com