Charoen 'near control' of F&N

SINGAPORE - Billionaire Charoen Sirivadhanabhakdi came closer Monday to winning control of Fraser & Neave Ltd (F&N) after a rival group failed to match his S$13.8 billion (314.7 billion baht, US$11.2 billion) offer for the 130-year-old property and beverage company.

  • Published: 21/01/2013 at 10:30 PM
  • Newspaper section: breakingnews

A group led by Overseas Union Enterprise Ltd. (OUE) said Monday it won't match the Jan 18 offer of S$9.55 a share by Thailand's richest man. The OUE group had bid S$9.08 a share in November.

NOTE: S$1 = 24.2 Thai baht

OUE's decision gives Mr Charoen the upper hand after a two-month battle over the 130-year-old company that has assets from soft drinks to serviced apartments. The billionaire has built a 40 per cent stake in F&N in his push to win the biggest takeover of a Singapore-based company.

"It's all over," said Jonathan Foster, Singapore-based director of special situations at Religare Capital Markets. "All said and done, S$9.55 is not a bad outcome. While it's not quite as good as what it could have got, I think the vast majority of F&N shareholders would be satisfied considering where the stock was trading before the saga erupted."

Mr Charoen's TCC Assets Ltd. still needs to gain the support of a majority of shareholders. His bid is two per cent lower than F&N's closing price of S$9.74 Monday.

Mr "Charoen seems pretty convinced that his S$9.55 offer is as generous as he's going to get," said Jason Hughes, head of premium client management at IG Markets in Singapore. "In all likelihood, there would be enough willing sellers at that price. On the balance of probability, F&N is now TCC's for the taking."

F&N shares have gained 22 per cent since Mr Charoen announced made his initial investment in the company on July 18.

OUE, a Singapore-based property company, had enlisted Japanese brewer Kirin Holdings Co. in its November bid. OUE would get the company's property business and Kirin would take the food and beverage unit, under that pact. The Japanese brewer would offer S$2.7 billion for F&N's food and beverage business, if the group won enough support to complete the takeover.

"It would be impossible for Kirin to get the beverage business," said Mikihiko Yamato, deputy head of research for JI Asia in Tokyo. "It's unimaginable for the rival ThaiBev to hand it over to Kirin."

ThaiBev or Thai Beverage Pcl (THBEV), which owns shares in F&N, is Thailand's biggest beer maker that's controlled by Mr Charoen. Kirin, which has a 14.8 per cent stake in F&N, hasn't decided what it would do with its shares, said Kan Yamamoto, the company's spokesman. He declined to comment on the OUE decision.

OUE said Monday that to win majority shareholder support it would have had to raise its bid "to a level which is no longer as attractive." The decision led to a lapse in its offer, which expired Monday.

"OUE decided to cut their losses and keep on going with their own business," Hughes said.

Mr Charoen, 68, agreed to buy a 22 per cent stake in F&N in July, sparking a fight for its assets. He had offered S$8.88 a share in September. His latest offer will remain open until Feb. 4, F&N said in a statement.

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