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Speculation ThaiBev adds to F&N stake

Publication Date : 11-08-2012


Thai Beverage Plc is suspected of having built up its stake in Fraser and Neave (F&N), following a big-lot transaction of 18.75 million shares in the Singapore food and drink conglomerate.

As the Thai company and its ally, Kindest Place Groups, are fighting for a firm foothold in Asia Pacific Breweries (APB), there was speculation that ThaiBev was behind the big-lot transaction yesterday. The shares accounted for 1.3 per cent of F&N's total issued shares.

In July, ThaiBev bought a 22-per-cent stake in F&N and has increased that to 24 per cent on the open market. It can build up the stake to 29 per cent before triggering a mandatory takeover bid.

This confirmed The Nation's report yesterday that the Thai company aimed to establish a permanent presence in the Singapore firm, not to profiteer from the recent hikes in share prices of F&N or its flagship beer business, Asia Pacific Breweries. To some analysts, such a move would also pressure Heineken, which bid for F&N's entire direct and indirect interests in APB, to raise the offer price.

Goh Han Peng, an analyst at DMG & Partners, told The Wall Street Journal that it's likely ThaiBev is behind the latest trade because it would pressure Heineken NV to increase the offer for APB. ThaiBev could also be strengthening its hold on APB to force Heineken into finding a way to cooperate with it, as they both want exposure to the fast-growing beer markets of Southeast Asia.

While ThaiBev built presence in F&N, Kindest Place Groups - also owned by Thai liquor tycoon Charoen Sirivadhanabhakdi - also bid for F&N's 7.3-per-cent stake in APB for S$55 a share, which offers a 10-per-cent premium from Heineken's offer. If successful, Kindest would see its stake in APB increased to 16 per cent.

Behind the fighting was the fact that Asia and developing countries are now the major contributors to the global beer market.

A report conducted by Kirin Holdings' research arm showed that it was the 27th consecutive year that beer production marked an increase, thanks to robust demand in Asia and developing countries. The report said 192.71 million kilolitres of beer were produced last year, up 3.7 per cent from 2010. China was the world's largest beer producer - accounting for about 25 per cent - for the 10th straight year. The United States saw a slight decrease in production from the year before but still ranked second at 11.7 per cent, followed by Brazil and Russia.


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