Fraser & Neave Ltd. surged to a record in Singapore trading after Thai billionaire Charoen Sirivadhanabhakdi raised his bid for the S$14 billion ($11.4 billion) drinks and property company, driving speculation a rival will counter his offer.
F&N shares rose as much as 1.8 percent to S$9.75 after Charoen’s TCC Assets Ltd. boosted its offer to S$9.55 a share on Jan. 18. A group led by Overseas Union Enterprise Ltd. (OUE), which offered S$9.08 a share in November, said it’s seeking clarification from Singapore’s Securities Industry Council on the revised bid.
At stake is the biggest takeover of a Singapore-based company, a 130-year-old group with operations ranging from beverages to serviced apartments. Charoen has raised his stake to more than 40 percent, while OUE, which has a 4 p.m. Singapore time deadline today for a revised offer, has a commitment for 14.8 percent of the company.
“If OUE wants to stay in the game, it will have to come up with a higher offer than what’s currently on the table,” said Goh Han Peng, an analyst at DMG & Partners Securities Pte. “TCC has accelerated the process and now has 40 percent of F&N. For OUE to have a decent chance, it has to increase its offer to a more attractive level.”
The Securities Industry Council, Singapore’s regulator, has said it would order an auction if neither company said its bid was final by yesterday. OUE would have to announce any revised bid publicly between 5:30 p.m. and 6 p.m.
The auction ends at 6 p.m. if neither company makes a higher bid today. Charoen’s group can respond tomorrow to any new OUE proposal.
“OUE is seeking clarification from the SIC on TCC’s revised offer,” said Danny Cheung, external spokesman for OUE from Fleishman-Hillard, without elaborating.
TCC boosted its F&N stake by more than 6 percent to 40.09 percent by buying shares at S$9.55, the Thai company said in statements last week.
Charoen’s offer and share purchases are 1 percent lower than the stock’s 20-day average of S$9.65 as of Jan. 18.
“The key clarifications, not only for OUE but for the market, are how and when the sale and purchase of over 6 percent of F&N came about, and who was behind the selling?” said Jonathan Foster, director of special situations at Religare Capital Markets. “No one needs to point any fingers at this stage, but the SIC needs to get comfortable that this is a genuinely arms-length transaction.”
Vichate Tantiwanich, a spokesman for Charoen’s Thai Beverage (THBEV), didn’t answer calls to his mobile phone or immediately respond to e-mail. TCC in a Jan. 19 statement said it had bought shares from unrelated parties.
A phone call to Daniel Teo, assistant secretary at the regulator, went unanswered. He didn’t immediately respond to an e-mail seeking a comment on the clarification sought by OUE and its effect on the auction.
F&N gained 1.4 percent to S$9.71 as of 2:11 p.m. in Singapore. OUE rose 0.7 percent to S$2.74, and Thai Beverage climbed 2.3 percent to 44.5 Singapore cents.
OUE, a Singapore-based property company, has enlisted Japanese brewer Kirin Holdings Co. (2503) in its S$13.1 billion bid. OUE would get the company’s property business and Kirin would take the food and beverage unit, under the pact they announced last year. The OUE-led group has the backing of Kirin’s 14.8 percent stake in F&N.
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. F&N has said it had committed to pay the OUE-led group a break-up fee of as much as S$50 million if a competing offer is successful.
Charoen, 68, 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. He had offered S$8.88 in September.
Charoen’s 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.
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