Fraser & Neave Ltd. said Overseas Union Enterprise Ltd.’s S$13.1 billion ($10.7 billion) takeover offer is “not compelling but fair” as the company may be worth more, according to a circular to investors on its website.
An OUE-led group offered to pay S$9.08 a share for the company on Nov. 15. Thai billionaire Charoen Sirivadhanabhakdi, through Thai Beverage Pcl and TCC Assets Ltd., in September bid S$8.88 a share for the 70 percent of Singapore-based F&N he didn’t already own. F&N has said it agreed to pay the OUE consortium a break-up fee of as much as S$50 million if a competing offer is successful.
F&N’s sum-of-parts valuation is between S$8.58 and S$11.56 a share, or between S$12.4 billion and S$16.7 billion, the company said, based on JPMorgan’s estimate. The property unit is worth S$4.6 billion to S$7 billion, and its food and beverage business is valued at between S$1.9 billion to S$3.8 billion, according to JPMorgan’s valuation in the circular.
F&N’s board announced its view following recommendations from adviser JPMorgan Chase & Co. The language is the same as what F&N directors used to describe an earlier offer from Charoen.
“The independent directors who hold shares intend not to accept the OUE Offer in respect of their own direct holdings in the shares unless the OUE offer turns unconditional,” the board said in the circular.
F&N rose 0.1 percent to S$9.66 at the close in Singapore. The company has a market value of S$13.9 billion at that price.