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Thai Bev Increases Fraser & Neave Stake to Near Maximum Level

Thai Beverage Pcl boosted its holding in Fraser & Neave Ltd. to 29 percent, putting it just below the level at which acquirers of company stakes are expected to begin takeover offers.

Thai Bev, controlled by Thai billionaire Charoen Sirivadhanabhakdi, acquired an additional 2.6 percent stake for about S$316.1 million ($252.4 million), the Bangkok-based company said yesterday in an e-mailed statement. Singapore’s takeover guidelines require a buyer of a 30 percent stake to bid for the rest of the company in a so-called open offer.

The purchase will give Charoen’s company a greater voice when F&N shareholders vote on Heineken NV’s $4.5 billion offer for F&N’s 40 percent stake in Asia Pacific Breweries Ltd. Even with the higher stake, the Thai brewer won’t be able to scuttle Heineken’s bid without the support of a sufficient number of outside shareholders to give it a 50 percent voting majority. ThaiBev may also face hurdles raising cash to buy the whole of F&N, which has a market value of S$11.8 billion.

“By increasing the stake, it puts pressure on Heineken to react, but it’s quite difficult for them to mount a general offer because it’s stretched financially,” said Goh Han Peng, a Singapore-based analyst at DMG & Partners Research Pte. “For F&N shareholders, especially for funds, most will go for the sale if they are able to monetize APB at such a good price.”

Heineken has sought full control of APB as it attempts to protect its hold over a key emerging-market business and as brewing assets in high-growth economies are in short supply after a decade of consolidation in the industry.

Heineken, the world’s third-biggest brewer, on Aug. 17 raised its offer for a controlling stake in the maker of Tiger beer to S$53 a share from S$50 to prevent a company linked to Charoen from disrupting its takeover plans. Kindest Place Groups Ltd., controlled by Charoen’s son-in-law, had offered to buy 7.3 percent of the brewer from F&N for S$55 per share.

APB, set up in 1931 as a joint venture between F&N and Heineken, has rights to brew Bintang beer in Indonesia, Anchor in China, Southeast Asia and Sri Lanka, and Heineken from China to New Zealand.

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