Thailand’s third-richest man has raised his stake and takeover offer for Fraser and Neave Ltd to fend off a bid by a group led by Indonesian tycoon Stephen Riady as the battle for the Singapore property and drinks group draws towards a close.
Thai billionaire Charoen Sirivadhanabhakdi appears to have the advantage going into a formal auction that begins on Monday to decide the fate of the 130-year-old company, which sold its prized Tiger Beer brand to Heineken NV for S$5.6 billion ($4.56 billion) last year.
The Thai gambit values F&N at nearly $11.3 billion and puts the pressure on a consortium led by Riady’s Singapore-listed property firm Overseas Union Enterprise to counter the offer or withdraw from Southeast Asia's largest-ever corporate acquisition.
“This has extended Charoen’s advantage. He has an upper hand over OUE because he’s only about 10% away from gaining majority control of F&N,” said Goh Han Peng, an analyst at DMG & Partners Securities in Singapore.
Monday’s auction was triggered because neither bidder had declared a final offer by a deadline on Sunday set by Singapore’s Securities Industry Council.
Thailand's TCC Assets, headed by Charoen, raised its offer last week to S$9.55 a share, above the S$9.08 bid by the Overseas Union-led consortium. F&N shares rose 1.4% to S$9.71 in early trade on Monday. Charoen acquired an additional 90.8 million shares, or a 6.3% stake in F&N, at S$9.55 each on Friday and another 2.2 million shares on Saturday.
The move raised his total stake — held through TCC Assets and Thai Beverage PLC — to 40.6% including acceptances. Charoen's previous offer was S$8.88 per share. The offers by Charoen and the Overseas Union group are conditional on getting more than 50% of F&N. If Charoen wins, F&N will have to pay a break fee of up to S$50 million to the Overseas Union group. F&N has a property portfolio worth more than S$8 billion and soft drinks, dairy and publishing businesses. It sold Tiger Beer to Dutch brewing giant Heineken in September. F&N's independent financial advisor JP Morgan has said its sum-of-the-parts valuation is S$8.58 to S$11.56 per share.
In the auction, each side can revise its offer by a minimum of one Singapore cent per share once a day. The revision must be unconditional and in cash. The process will continue until neither side revises its offer or the securities watchdog stops the auction.
Forbes says Charoen is worth $6.2 billion. His