Thai billionaire Charoen Sirivadhanabhakdi boosted his stake in Fraser & Neave Ltd. to almost 40 percent and raised his takeover offer for the real estate and soft-drink company to block a rival group.
Charoen’s TCC Assets bid S$9.55 a share, topping a Nov. 15 offer of S$9.08 a share from a group led by Overseas Union Enterprise Ltd. (OUE), according to a stock exchange statement late yesterday. His latest offer is a 0.3 percent discount to yesterday’s closing price of S$9.58 and values the company at S$13.8 billion ($11.2 billion).
“I don’t think it’s game over for OUE,” said Jonathan Foster, Singapore-based director of global special situations at Religare Capital Markets. “It’s in their interest to put their best foot forward because the Thais are not necessarily going to stay a minority shareholder if OUE bids above fair value for F&N.”
The billionaire, Thailand’s richest man, is seeking to expand his businesses in Asia by winning control of the 130- year-old company that has assets from serviced apartments to beverages. His latest proposal escalates the bidding war with OUE, a Singapore-based property company that has enlisted Japanese brewer Kirin Holdings Co. in its bid.
The OUE-led group has the backing of Kirin’s 15 percent stake in F&N. OUE would get the company’s property business and Kirin would take the food and beverage unit, under a pact they announced last year.
Charoen agreed to buy a 22 percent stake in F&N in July, sparking a fight for its assets. He has been adding to his holdings. TCC said it bought a further 6.3 percent of F&N and now owns or has acceptances for 39.94 percent of the shares.
The Business Times reported today that PAG Capital, a Hong Kong private equity fund, may have been the buyer for TCC. Charoen’s company issued a separate statement to the stock exchange as a clarification to the report to say PAG wasn’t a counterparty or acting in concert with his group. The stock purchase was made through unrelated parties, TCC said.
F&N shares have traded above the price of the previous two offers, indicating that investors were expecting a higher bid. Charoen had offered S$8.88 in September.
An auction process will begin after the weekend if neither bidder has declared its offer final, Singapore’s securities regulator said this month. If one or other indicates its proposal is final by tomorrow, the deal will be decided by a shareholder vote. If either group wishes to raise its offer after that date, it must submit the bid to the Securities Industry Council. The rival will have time to respond.
Kirin has agreed to tender its 14.8 percent stake in F&N, OUE has said. The Japanese brewer will offer S$2.7 billion for F&N’s food and beverage business, if OUE wins enough support to complete the takeover.
JPMorgan Chase & Co., F&N’s independent financial adviser, said yesterday that Kirin’s offer for the food and beverage business is 5.2 percent lower than the mid-point range of the value of the asset. The bank valued the unit at S$1.88 billion to S$3.82 billion, based on the sum-of-parts valuation. It also said yesterday that F&N isn’t a “distressed” seller.
F&N has said it had committed to pay the OUE consortium a break-up fee of as much as S$50 million if a competing offer is successful.
Charoen, 68, has a net worth of $9.6 billion, according to data from the Bloomberg Billionaires Index. His unlisted business, TCC Group, has a real estate unit. His Thai Beverage, which sells the Chang brand of beer, gets almost all its revenue from its home market.
OUE Executive Chairman Stephen Riady is a son of Mochtar Riady, who controls Indonesia’s Lippo Group, with businesses ranging from real estate and financial services to food across Asia. If successful, it would be the biggest ever acquisition of a Singapore-based company, according to data compiled by Bloomberg.
OUE, which gets about 65 percent of its revenue from hotel operations, plans at least one investment a year in Singapore to boost property holdings that include office towers, luxury apartments and malls, Stephen Riady said in an August interview.
Heineken NV (HEIA) won control of F&N’s beer unit, the maker of Tiger beer, in a deal that closed in November.
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