Overseas Union Enterprise Ltd. put the burden back on Thailand’s richest man in a bidding war for Fraser & Neave Ltd. by extending the deadline for its S$13.1 billion ($10.7 billion) offer for the Singapore property and drinks company.
OUE, headed by Executive Chairman Stephen Riady, and its partners moved the expiry date on its S$9.08 per share bid to Jan. 14, according to a stock exchange statement yesterday. Thai billionaire Charoen Sirivadhanabhakdi’s TCC Assets this week delayed the closing date on its S$8.88 per share offer until Jan. 10.
“The ball is actually on TCC’s court to improve their offer before OUE needs to react,” said Jason Hughes, head of premium client management at IG Markets in Singapore.
Fraser & Neave shares have traded above both offers in a sign investors expect the takeover battle to escalate. Charoen agreed to buy a 22 percent stake in F&N in July, setting off a fight for the company’s soft drink and property assets and prompting the sale of its beer unit to Heineken NV.
Fraser & Neave shares dropped 0.1 percent to close at S$9.66 yesterday.
OUE, a Singapore-based property company, has enlisted Kirin Holdings Co., Japan’s largest drinks maker, in its bid. OUE would get the company’s property business and Kirin would take the food and beverage unit.
Kirin has agreed to tender its 14.8 percent stake in F&N, OUE has said. The Japanese brewer will offer S$2.7 billion for F&N’s food and beverage business if OUE wins enough support to complete the takeover.
Fraser & Neave on Dec. 31 said its independent financial adviser JPMorgan Chase & Co. had found Kirin’s offer “fair but not reasonable, from a financial point of view,” partly because the Japanese brewer’s bid was based on a negotiated sale rather than an auction.
“For OUE, they now need to work through how a sale of F&N’s food and beverage business is going to happen as the JPMorgan report has cast uncertainty on Kirin’s ability to buy those assets,” said Jonathan Foster, Singapore-based director of global special situations at Religare Capital Markets. “For TCC, it’s more straightforward in that they have to decide how much they are willing to pay while making sure they don’t overpay.”
F&N has said it had committed 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 board has said an independent adviser has found both offers “not compelling but fair.”
Charoen’s unlisted business, TCC Group, has a real estate unit. His Thai Beverage Pcl, which sells the Chang brand of beer, gets almost all its revenue from its home market. Charoen, 68, has a net worth of about $8.9 billion based on current calculations from the Bloomberg Billionaires Index.
The Thai billionaire in July agreed to pay S$2.78 billion for an initial stake in F&N by acquiring the stock held by Oversea-Chinese Banking Corp. and its partners. He later acquired more shares to take him near the threshold to make a bid.
Charoen’s offer for F&N valued the rest of the company at about S$8.9 billion on Sept. 13, the day TCC offered S$8.88 a share for the 69.6 percent of F&N it didn’t already control.
OUE Executive Chairman Stephen Riady is a son of Mochtar Riady, who controls Indonesia’s Lippo Group, with businesses ranging from real estate and financial services to food across Asia. If successful, it would be the biggest ever acquisition of a Singapore-based company, according to data compiled by Bloomberg.
OUE, which gets about 65 percent of its revenue from hotel operations, plans at least one investment a year in Singapore to boost property holdings that include office towers, luxury apartments and malls, Riady said in an interview in August.
Heineken won control of F&N’s brewery unit, the maker of Tiger beer, in a deal that closed in November.