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OUE follows Thai mogul in extending deadline for its bid

Publication Date : 04-01-2013

 

A consortium led by property company Overseas Union Enterprise (OUE) extended the deadline for its S$13.1 billion (US$10.7 billion) bid for Fraser & Neave (F&N) yesterday.

OUE's unchanged $9.08-per- share offer, which had been due to expire yesterday, will now run out on January 14.

The extension comes a day after rival bidder Charoen Sirivadhanabhakdi extended his S$8.88- per-share offer till next Thursday. It was the fifth time the Thai tycoon had extended his offer.

The battle for property and beverage giant F&N has dragged on for months, with the two warring parties eyeing each other to see who blinks first, say observers.

Charoen unveiled his offer in September last year; OUE responded with a counter-offer in November.

F&N stock slipped one cent to S$9.66 yesterday, but remains above both parties' bids, indicating that investors expect the bidding war to escalate.

But this may take a while.

OUE's offer document went out on December 6 last year, and the offer can run for a maximum of 60 days, according to takeover rules. This gives the group until February 4, but it will need to leave any offer open for at least 14 days if it revises its bid. This means it has until January 21 to revise the offer.

Charoen can align his timetable with OUE's. Further extensions beyond January 21 are possible if the Securities Industry Council agrees.

"They could wait until the time is running out and somebody makes a move," said DMG & Partners analyst Goh Han Peng.

Charoen is seen as having the upper hand, as his parties have more than 34 per cent of F&N, including acceptances.

OUE has less than 15 per cent, including the acceptance from Kirin Holdings, which agreed to tender its 14.8 per cent F&N stake to it.

Kirin also agreed to buy F&N's food and beverage business for S$2.7 billion if the OUE offer is successful.

OUE's financial risks in making the offer had been reduced. F&N had agreed to pay it a "break fee", of the amount spent on legal and financial advisers and lenders, if a competing offer for F&N becomes unconditional within a certain timeframe. The fee is capped at S$50 million.

F&N's group financial controller Hui Choon Kit had earlier said that OUE had requested the break fee, but TCC Assets, Charoen's investment vehicle that he is using for his general offer, did not ask for one.

JPMorgan, the independent financial adviser to F&N's independent directors, on Monday said that Japanese brewer Kirin's S$2.7 billion offer for F&N's food and beverage business is "fair but not reasonable".

OUE is bound to vote in favour of the sale of the food and beverage business to Kirin only if the offer is deemed "fair and reasonable".

"Kirin, if it is keen, may have to revise its offer," said DMG's Goh.

US$1 = S$1.22

 

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