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Asia Pacific Breweries Jumps on Heineken Deal

Asia Pacific Breweries Ltd. (APB) gained the most in almost two weeks in Singapore trading after Heineken NV (HEIA) boosted its bid to S$5.6 billion ($4.5 billion) for Fraser & Neave Ltd.’s stake in the Tiger beer maker

Asia Pacific Breweries climbed 4.8 percent to reach Heineken’s increased bid of S$53 a share. Fraser & Neave Ltd. dropped 0.36 percent to S$8.37. Trading in the stocks was halted on Aug. 17 before announcements on the bid and the Singapore stock market was closed yesterday.

Heineken NV, the world’s third-biggest brewer, in an Aug. 17 statement said it agreed to buy Fraser & Neave Ltd.’s 40 percent holding in the brewer for S$53 per share, up from an initial bid of S$50. A sale of the stake in APB’s brewing business may draw interest from buyers in other parts of F&N, which also has soft-drink and real-estate operations.

“Most F&N shareholders will support” the Heineken offer, said Goh Han Peng, an analyst at DMG & Partners Securities. “If they support the deal they have a potential to receive a special payout.”

Japan’s Kirin Holdings Co. (2503), which has a 15 percent stake in the Singaporean company, has said it is interested in F&N’s soft-drink and food businesses. Coca-Cola Co. (KO) has explored a bid for the drinks operations, several people with knowledge of the matter have said.

Thai Billionaire

F&N’s board has agreed not to solicit, engage in discussions or accept any other offers for its interest in APB, according to Heineken’s statement. Singapore-based F&N has also agreed to pay a break-up fee of about S$56 million if the transaction isn’t completed in 120 days.

Heineken was spurred to make an offer for Asia Pacific Breweries last month after billionaire Charoen Sirivadhanabhakdi’s Thai Beverage (THBEV) agreed to buy a 22 percent stake in F&N. That holding has now risen to about 26 percent. Kindest Place Groups Ltd., owned by Sirivadhanabhakdi’s son-in- law, also bought an 8.6 percent stake in APB and subsequently offered to buy 7.3 percent of the brewer from F&N for S$55 per share.

Charoen’s family stands to benefit from the higher bid for APB. Based on a purchase price of S$45 a share, the value of Kindest Place’s 8.6 percent stake in APB would increase by about S$178 million if it sells at Heineken’s higher price of S$53 a share. Thai Beverage shares rose 1.5 percent to 34 Singaporean cents.

To contact the reporter on this story: Anjali Cordeiro in Hong Kong at acordeiro2@bloomberg.net

To contact the editor responsible for this story: Anjali Cordeiro at acordeiro2@bloomberg.net

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