Thailand’s richest man came closer to winning control of Fraser & Neave Ltd. after a rival group failed to top his S$13.8 billion ($11.2 billion) offer for the 130-year-old property and beverage company.
A group led by Overseas Union Enterprise Ltd. said yesterday it won’t match Thai billionaire Charoen Sirivadhanabhakdi’s Jan. 18 offer of S$9.55 a share. The OUE group had bid S$9.08 a share in November.
OUE’s decision gives Charoen the upper hand after a two-month battle over a company that has assets from soft drinks to serviced apartments. The billionaire has built a 40 percent stake in F&N in his push to win the biggest takeover of a Singapore-based company.
“It’s all over,” said Jonathan Foster, Singapore-based director of special situations at Religare Capital Markets. “All said and done, S$9.55 is not a bad outcome. While it’s not quite as good as what it could have got, I think the vast majority of F&N shareholders would be satisfied considering where the stock was trading before the saga erupted.”
Charoen’s TCC Assets Ltd. still needs to gain the support of a majority of shareholders. F&N fell 2 percent to S$9.55 at 9 a.m. in Singapore trading, matching Charoen’s bid.
“Charoen seems pretty convinced that his S$9.55 offer is as generous as he’s going to get,” said Jason Hughes, head of premium client management at IG Markets in Singapore. “In all likelihood, there would be enough willing sellers at that price. On the balance of probability, F&N is now TCC’s for the taking.”
F&N shares have gained 22 percent since Charoen announced his initial investment in the company on July 18, three times the gain in the Singapore benchmark Straits Times Index.
OUE, a Singapore-based property company, had enlisted Japanese brewer Kirin Holdings Co. in its November bid. OUE would get the company’s property business and Kirin would take the food and beverage unit, under that pact. The Japanese brewer would offer S$2.7 billion for F&N’s food and beverage business, if the group won enough support to complete the takeover.
“It would be impossible for Kirin to get the beverage business,” said Mikihiko Yamato, deputy head of research for JI Asia in Tokyo. “It’s unimaginable for the rival ThaiBev to hand it over to Kirin.”
Beer maker ThaiBev or Thai Beverage Pcl, which owns shares in F&N, is controlled by Charoen. Kirin, which has a 14.8 percent stake in F&N, hasn’t decided what it would do with its shares, said Kan Yamamoto, the company’s spokesman. He declined to comment on the OUE decision.
Kirin would get about S$2 billion for its 14.8 percent stake if it decides to sell at Charoen’s price. The stock gained 5 percent to 1,100 yen at 10:10 a.m. in Tokyo trading.
Charoen’s offer values the company at S$13.8 billion and he would pay about S$8.3 billion for the 60 percent he doesn’t control.
OUE said yesterday that to win majority shareholder support it would have had to raise its bid “to a level which is no longer as attractive.” The decision led to a lapse in its offer, which expired yesterday.
“OUE decided to cut their losses and keep on going with their own business,” Hughes said.
Thai Beverage jumped 4.6 percent to 46 Singapore cents, set for a record. OUE rose 4 percent to S$2.85, set for the highest since Oct. 5.
Charoen, 68, agreed to buy a 22 percent stake in F&N in July, sparking a fight for its assets. He had offered S$8.88 a share in September. His latest offer will remain open until Feb. 4, F&N said in a statement.
The Thai billionaire was born and raised in Bangkok’s Chinatown district. He bid for the rights to operate distilleries during a liberalization of the nation’s liquor industry, before expanding into beer, alcohol, sugar, and packaging businesses.
Charoen’s unlisted business, TCC Group, has a real estate unit. His Thai Beverage, which sells the Chang brand of beer, gets almost all its revenue from its home market.
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.