August 14, 2012 6:17 am

ThaiBev seals purchase of 22% F&N stake

Workers stack beer crates at a Thai Beverage Plc Chang brewery©Bloomberg

Thai Beverage has become the largest shareholder in Fraser and Neave with the completion of its acquisition of 22 per cent of the Singapore conglomerate, adding to pressure on Heineken as the Dutch brewer vies for control of Asia Pacific Breweries.

The deal comes less than a day after it emerged that the Thai brewer’s latest purchases of F&N shares in the open market had given it an additional 4.2 per cent stake, taking ThaiBev’s total holding in F&N to 26.2 per cent.

It is the latest twist in a bid battle focused on Asia Pacific Breweries, controlled by a joint venture between F&N and Heineken, but which analysts say could also signal the break-up of food, beverage and property conglomerate F&N.

Japanese drinks group Kirin, a 15 per cent cent shareholder in F&N, is also considering its options with analysts suggesting it may be interested in snapping up F&N’s soft drinks business.

With ThaiBev as the largest shareholder in F&N, Heineken must weigh the possibility of having a rival Asian brewer with designs on the maker of Tiger beer as an influential shareholder on the board.

“Shareholder change at the F&N level could create uncertainty for Heineken’s position in APB,” Nomura analysts said.

ThaiBev last month triggered a complex round of manoeuvring over APB by announcing it had agreed to buy 22 per cent of F&N from Oversea-Chinese Banking Corporation, Singapore’s second-largest bank by assets, and affiliates.

At the same time, a company related to ThaiBev, Kindest Place, agreed to buy a direct 8.6 per cent stake in APB from the same sellers.

Both deals were finalised on Tuesday, the sellers said in announcements to the Singapore stock exchange.

That adds to pressure on Heineken as it considers whether to raise an offer it made shortly after ThaiBev’s initial move for APB. The Dutch brewer offered S$50 a share, or S$4.2bn (US$3.4bn), for a 32.4 per cent stake held by F&N in a joint venture through which the two companies control APB.

Heineken offered the same per-share price for some non-APB assets held by F&N valued at S$163m, making its total offer worth S$5.3bn. The total offer has been recommended by F&N’s board and is expected to be put to shareholders within about two weeks.

However, Kindest Place, owned by the son-in-law of ThaiBev’s billionaire chairman Charoen Sirivadhanabhakdi, subsequently made an unsolicited S$55 a share offer for the direct 7.3 per cent holding that F&N has in APB. That values APB at about 10 per cent more than Heineken’s offer.

Analysts say Heineken may have to consider raising its S$50 a share offer. APB is one of the few attractive brewing companies left in emerging markets, at a time of slow growth in Europe.

Kindest Place’s offer, which would give the Thai company a 16 per cent stake in APB if successful, expires on August 24.

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