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F&N directors to make way for Thai tycoon

Publication Date : 30-01-2013


Directors at drinks and property conglomerate Fraser and Neave (F&N) are preparing to resign en masse to give Thai tycoon Charoen Sirivadhanabhakdi a free hand as he takes over the company.

This changing of the guard, announced yesterday, will allow the new owner to closely chart the future direction of one of Singapore's oldest companies.

Charoen, the man behind Chang Beer brewer Thai Beverage, is on track to win F&N after a tense six-month battle. His final bid values the firm at S$13.75 billion (US$11 billion).

All nine directors will step down after the close of Mr Charoen's general offer for F&N, due to be on February 4, though the deadline could be extended if his S$9.55 (US$7.72) per share bid turns unconditional.

F&N makes products such as 100Plus sports drink and the Seasons range of teas and Asian drinks.

Its directors explained the rationale for resigning to about 300 shareholders at the company's annual general meeting at the Grand Copthorne Waterfront Hotel.

Chairman Lee Hsien Yang said at the 90-minute meeting yesterday that the resignations would allow Charoen "a free hand to appoint a board to chart a course forward for the company". He stressed that the directors would stay around to ensure a smooth transition to a new board.

The takeover process could start very soon if the offer from TCC Assets - Charoen's investment vehicle - turns unconditional.

In this instance, F&N's board would consult TCC Assets in appointing three new directors. After that, Charoen could fill the board with more of his nominees.

The Thai tycoon started building his F&N stake in July last year. He owns 46.13 per cent of the 130-year-old conglomerate, excluding general offer acceptances which will lift his holdings.

Charoen needs 50 per cent including acceptances by February 4 to make his offer unconditional.

But he already scored a victory this month with the withdrawal of his former bidding rival Overseas Union Enterprise, after the tycoon raised his offer from his earlier bid of S$8.88 (US$7.18) per share.

Investors seemed divided about the prospect of another Singapore icon falling into foreign hands, about four months after Dutch brewer Heineken secured control of Asia Pacific Breweries, which makes Tiger Beer.

"F&N (shares) have been held by families for generations. We are losing it to a foreign company so it's a bit sad," Michael Tay, 55, told The Straits Times on the sidelines of the meeting. He is considering accepting Charoen's offer for his stock.

But Johnny Lim, 51, said the most important thing is for shareholders to have made money on their investments.

"It doesn't matter if it is in foreign hands," he said. "This is an open market, a free market."

One unanswered question is whether Japanese brewer Kirin Holdings, F&N's No. 2 shareholder, will accept Charoen's offer for its 14.8 per cent stake.

Hirotake Kobayashi, Kirin's representative on F&N's board, would say only that the decision on the stake would be made by February 4 and would maximise value for Kirin's shareholders.

But market talk is that Kirin could sell its stake as Kobayashi is resigning from the board as well.


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