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New offer for APB 'not comparable' to Heineken's

Publication Date : 09-08-2012


The offer made by Kindest Place Groups for Asia Pacific Breweries (APB) shares is not comparable to Heineken's bid, the Dutch brewer has said.

Although Kindest Place, a company linked to Thai Beverage, is offering S$5 more per APB share, Heineken is offering to buy a much larger stake, it noted in a statement yesterday.

Regardless of whether shareholders agree with Heineken, it is clear that Kindest Place's offer has thrown Heineken's plans off track, observers say.

Last month, Heineken made an offer for Fraser & Neave's (F&N) entire 39.7 per cent stake in APB.

This includes the 7.3 per cent stake that F&N holds directly in APB, as well as its indirect 32.4 per cent stake that is held through Asia Pacific Investment, a joint venture between F&N and Heineken.

Kindest Place is offering a higher price - S$55 for each APB share, compared with Heineken's bid of S$50 - but it is angling only for F&N's direct 7.3 per cent stake in APB, Heineken noted.

Furthermore, Heineken has also offered to buy out F&N's non-APB assets in Asia Pacific Investment for $163 million.

As a result, F&N would make a total of S$5.3 billion from the Heineken offer, while Kindest Place's offer would garner it only S$1 billion, the Dutch brewer said.

If its offer is completed, Heineken will also make a mandatory general offer for the remaining shares in APB that it does not already own.

Ultimately, Heineken could end up forking out up to S$7.7 billion to F&N and other APB shareholders as a result of the deal.

"Heineken continues to believe the Heineken offer represents compelling value for F&N's and APB's shareholders," its statement said.

Heineken is continuing its discussions with F&N about its offer, it added.

F&N's board of directors have, in fact, already accepted Heineken's offer, and have said they will recommend F&N shareholders to vote in favour of it at an upcoming meeting.

But Kindest Place's counter offer will now throw that plan into question.

"F&N's board is duty- bound to consider the new bid. So if they haven't yet held the meeting, it would make sense for them to hold it back and decide on both offers," said a corporate lawyer.

"And if, let's say, Heineken decides to throw in an even higher offer, there is no knowing when or how this might end," he added.

F&N has not set a date for the shareholders' meeting, which would likely take place months from now.

Before a meeting can take place, lawyers for both F&N and Heineken would have to draw up a formal sale and purchase agreement as well as a shareholders' circular. This process would take about four months in total.

Now, shareholders will simply have to wait to see whether Heineken sweetens its deal, and if not, whether F&N's board of directors decide to accept or decline Kindest Place's offer.

F&N has to respond to the latest offer by next Thursday.

F&N shares ended 21 cents higher at S$8.49 while APB shares soared S$3.66 to $52.50.

* US$1 = S$1.24


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