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Thai tycoon launches US$7.16b bid for F&N

Publication Date : 14-09-2012

 

Rumour turned to reality yesterday when Thai Beverage tycoon Charoen Sirivadhanabhakdi launched an S$8.8 billion (US$7.16 billion) strike for Fraser and Neave (F&N) - which could be Singapore's largest takeover.

There has been incessant market talk for days that a Thai-led bid was in the works and yesterday, Mr Charoen, 68, finally nailed his colours to the mast.

His bold gambit puts him in direct opposition to giant Dutch brewer Heineken and sets the stage for one of the most dramatic corporate battles in years.

"I haven't seen something of this type of intensity since I started in the finance industry in the 1980s," said CIMB Research executive director Song Seng Wun. "This is not out of the ordinary on Wall Street, but here in Singapore, it is rare to have this kind of more intense tussle."

Even though Mr Charoen's move was tipped this week, it has still thrown a sizeable cat among the corporate pigeons, most notably at Heineken.

The Dutch brewer's chances of completing its S$5.4 billion purchase of F&N's Asia Pacific Breweries (APB) stake are now at risk. It reacted tersely, saying it noted the announcement: "The company will review the content carefully and has no further comment to make at this time."

F&N said it will appoint an independent financial adviser to guide the independent directors on the offer.

Mr Charoen, who was written off repeatedly by analysts as not having the financial firepower to buy out F&N, now takes centrestage. The hawker's son who became Thailand's third-richest man with a net worth of US$6.2 billion (S$7.6 billion) managed to secure financing from banks.

The actual offer was made through TCC Assets, an investment vehicle owned by Mr Charoen and his wife. It will offer S$8.88 per share for the 70 per cent of F&N Mr Charoen does not already control.

His Singapore-listed brewer Thai Beverage has built up a 29 per cent stake in F&N since July. TCC Assets then bought 1 per cent of F&N, taking his control over the 30 per cent mark, which necessitates a general offer for the rest of the firm.

One of the most intriguing aspects of the Thai offer is that it could disrupt a planned sale of F&N's stake in APB to Heineken.

The deal will be decided on Sept 28 by F&N shareholders. That meeting will still proceed but if Mr Charoen holds a big chunk of F&N stock, he could find himself with the whip hand.

"By making this offer, TCC and ThaiBev could be seeking to block the deal," said DMG & Partners analyst Goh Han Peng.

If Mr Charoen snares F&N, he would have spent over $12 billion including on his current stake - making it Singapore's largest corporate takeover, beating the $10 billion that United Overseas Bank paid for Overseas Union Bank in 2001.

 

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