DJ UPDATE: Thai Beverage Exploring Offer for Fraser & Neave With Unnamed Party
11 Sep 2012 10:45
DJ UPDATE: Thai Beverage Exploring Offer for Fraser & Neave With Unnamed Party
--Thai Beverage says exploring possible bid for all of Fraser & Neave with unnamed party
--Move may complicate Heineken's offer to buy F&N's stake in Asia Pacific Breweries
(Recasts throughout and adds analyst comment.)
By P.R. Venkat and Chun Han Wong
SINGAPORE--Thai Beverage PCL (Y92.SG) said Tuesday it is exploring a possible bid to buy Singapore-based conglomerate Fraser & Neave Ltd. (F99.SG) with an unnamed investor, a development that could complicate Heineken NV's (HEIA.AE, HINKY) move to acquire the conglomerate's stake in beer maker Asia Pacific Breweries.
Thaibev's statement comes as shareholders of Fraser & Neave are set to meet on Sept. 28 for a crucial vote to approve Heinken's bid to buy Fraser & Neave's entire 39.7% stake in Asia Pacific Breweries. Last month, the board of Fraser & Neave agreed to recommend Heineken's sweetened $4.5 billion offer to shareholders.
Thaibev didn't provide a reason for wanting to acquire Fraser & Neave and it didn't name the investor it is jointly exploring the bid with in its filing to the Singapore Exchange.
"The (ThaiBev) board understands that a party acting in concert with the company is exploring the possibility of making an offer for Fraser & Neave," ThaiBev, which is controlled by billionaire Thai tycoon Charoen Sirivadhanabhakdi, said in its filing.
ThaiBev already owns a 29% stake in Fraser & Neave, and is just one percent shy of reaching the 30% threshold that under Singapore takeover laws will trigger a mandatory offer for all of the Singaporean conglomerate that has businesses in beer, property, soft drinks and publishing.
"ThaiBev's intention is very clearly to scuttle the deal by Heineken," Lee Kok Joo, head of research at Phillip Securities, said.
Fraser & Neave declined to comment and Heineken representatives couldn't immediately be reached for comment.
Analysts say that Mr. Charoen, whose interests apart from the beer business, spans property to selling fruit juices and bottled water, could be looking to bid for Fraser & Neave jointly with ThaiBev.
"It could be anyone of the related entities of Mr. Charoen. Given that they (Mr. Charoen's group companies) are seeking a regional platform, Fraser & Neave provides systematic fit," Goh Han Png, an analyst with DMG Partners in Singapore said.
Mr. Charoen, through his TCC Land unit, has real-estate assets such as hotels and offices in Bangkok, Kobe, Hanoi, Singapore and New York, which compliments Fraser & Neave's property portfolio, while ThaiBev also has businesses that sell fruit juices and bottled water that could fit in with Fraser & Neave's non-beer operations.
At stake for Heineken is its plans to consolidate its position in the fast growing Asia beer market as full control of Asia Pacific Breweries would significantly boost the Dutch company's exposure to high-growth developing economies at a time when it is struggling with weakness in Europe.
Fraser & Neave and Heineken share an 81-year-old, 50-50 joint venture that owns 64.8% of Asia Pacific Breweries. Fraser & Neave also owns a 7.3% direct stake in Asia Pacific Breweries, while Heineken directly owns 13.9% of the company after acquiring shares from the market in recent weeks.
Heineken, which first offered to pay 5.3 billion Singapore dollars (US$4.25 billion) for Fraser & Neave's entire 39.7% stake in Asia Pacific Breweries in July, sweetened its offer to S$5.6 billion last month in a bid to keep rival bidders at bay.
Full control of Asia Pacific Breweries will see Heineken owning the Tiger and Bintag APB beer brands which nearly has 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.
Heineken needs a simple majority of Fraser & Neave shareholders to vote in favor of its offer for Asia Pacific Breweries.
