Battle for F&N Escalates After Thai Billionaire Boosts Offer

Thailand’s richest man and a rival group are facing an unprecedented auction over Fraser & Neave Ltd. in the escalating takeover battle for the 130-year-old company’s property and drinks businesses.

Thai billionaire Charoen Sirivadhanabhakdi’s TCC Assets raised its bid on Jan. 18 to 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. The OUE-group hadn’t issued a public response by 5:30 p.m. Singapore time on Sunday.

At stake is a Singapore-based company with businesses ranging from beverages and shopping malls to apartment projects across Southeast Asia.

The Securities Industry Council, Singapore’s regulator, has said it will order an auction if neither company said its bid was final by Jan. 20. If OUE wishes to raise its bid on Monday it must first submit the proposal to Singapore’s regulator by 4 p.m.

F&N shares rose as much as 1.8 percent to S$9.75, headed for a record close, in Singapore trading on Monday.

“TCC, having bought a block and increased their offer to $9.55, are obviously of the view that OUE has the capacity and desire to pay at least that price, despite cooling measures,” said Jonathan Foster, Singapore-based director of global special situations at Religare Capital Markets. “We do not have long to wait to find out.”

Singapore this month introduced new measures including higher stamp duty for home buyers to cool its property market.

Competitive Situation

“If the competitive situation between TCC and OUE Baytown continues to exist as at 5.30 p.m. on Sunday, 20 Jan. 2013, the auction procedure shall operate as regards any revision of either offeror’s offer,” the securities council said in a statement last week.

Charoen’s latest offer is a 0.3 percent discount to F&N’s closing price of S$9.58 on Jan. 18 and values the company at S$13.8 billion ($11.2 billion).

OUE, a Singapore-based property company, has enlisted Japanese brewer Kirin Holdings Co. in its S$13.1 billion bid. Under the rules of the auction, either bidder would have to first submit a new offer to the Singapore regulator. The rival would have time to respond.

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.

Additional Stake

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. Charoen’s company bought 2.2 million F&N shares to take its stake to 40.09 percent, according to a stock exchange statement on Sunday.

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.

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.

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.

Stephen Riady

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 won control of F&N’s beer unit, the maker of Tiger beer, in a deal that closed in November.

The Jakarta Globe is associated with the Lippo Group.

Bloomberg