Thailand’s Richest Gets Richer Chasing $11 Billion F&N Deal

Thailand’s richest man just got richer.

Billionaire Charoen Sirivadhanabhakdi is poised to win a S$13.8 billion ($11.2 billion) bid for Fraser & Neave Ltd.’s property and drinks empire. The takeover battle has boosted the value of his other stock holdings by more than $2 billion.

Charoen’s Bangkok-based companies have surged as investors bet his expanding influence and deal making will give his whole empire a boost. Beer maker Thai Beverage Pcl closed at a record yesterday in Singapore and his consumer goods distributor Berli Jucker Pcl has jumped 45 percent in about four months in Bangkok.

“At the moment, Charoen plays a very active role in Thailand,” said Kowit Pongwinyoo, Bangkok-based analyst at UOB Kay Hian. “That’s why people are speculating on Charoen related merger and acquisition fever.”

Charoen’s efforts to gain control of F&N were boosted this week after rival bidder Overseas Union Enterprise Ltd. pulled out. Buying F&N gives the tycoon a 130-year-old conglomerate with about S$3.6 billion in annual revenue and businesses from serviced apartments to beverages across Southeast Asia.

Midnight Bid

Charoen first invested in F&N in July and battled OUE for two months. He announced a bid of S$9.55 at close to midnight Singapore time on Jan. 18 to top the rival group’s offer. His holdings in the company rose to 42.5 percent, Charoen’s TCC Assets Ltd. said yesterday in a filing to the Singapore Exchange.

“He is a savvy businessman and a street-smart negotiator,” said Goh Han Peng, an analyst at DMG & Partners Securities Pte. “In this takeover tussle, he kept his cards to his chest. Patient and decisive, that’s how I would describe him.”

Buying F&N would cap a lengthy career during which Charoen, 68, expanded from running a distilling operation into beer, alcohol, sugar, and packaging businesses.

His ThaiBev has “massive distribution capacity” and will be able to ramp up sales of F&N brands in Thailand, analysts in Religare Institutional Research said in a note.

Having F&N’s property business will also expand his reach in the region, Goh said. TCC Assets also has a real estate arm.

The value of Charoen’s holdings in Thai Beverage and Berli Jucker have risen by at least $2.35 billion since when he made his September F&N bid, based on the latest disclosures of his holdings and calculations by Bloomberg from the stock prices.

Thai Beverage was unchanged as of 10:49 a.m. in Singapore, after closing at a record high S$0.455 yesterday. Berli Jucker gained 0.7 percent to close at 69 baht in Bangkok yesterday.

Chinatown Billionaire

Charoen was born and raised in Bangkok’s Chinatown district. He bid for the rights to operate distilleries during the liberalization of the nation’s liquor industry, and later expanded into real estate and other operations. He had a net worth of $9.9 billion as of 5:30 p.m., New York time, according to data from the Bloomberg Billionaire’s Index.

As the businesses have grown, he has sought an increased presence overseas. The billionaire is strong in “logistic, trading and manufacturing of food and beverage in Thailand,” said Sopawadee Lertmanaschai, secretary-general of Thailand’s Government Pension Fund. “F&N could be a springboard with the established brand to expand in the region.”

Along the way, Charoen has battled adversaries at home and overseas. Thai Beverage had to sell shares in Singapore in 2006 after anti-alcohol protesters blocked an offering in its home market. Orange-robed Buddhist monks and other protesters argued that a share sale by the maker of Chang beer and Mekhong whiskey would encourage alcoholism in a country where most people are Buddhist.

Fighting Carlsberg

In 2005, Charoen forced Carlsberg A/S to pay $120 million to settle a legal dispute with a brewer he controlled. His family’s purchase of a stake in Asia Pacific Breweries Ltd. pushed Heineken NV to make a bid and ultimately buy all of the maker of Tiger beer.

In the latest battle over F&N he fought another prominent Asian family. 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.

Charoen joins other prominent Thais in looking overseas. Charoen Pokhpand Group Co.’s $9.4 billion purchase of a stake in China’s Ping An Insurance (Group) Co. put Thai companies and their billionaire owners among the ranks of Asia’s biggest overseas acquirers over the past year.

“A lot of Thai businessmen have done well in recent years,” said Goh, the DMG & Partners analyst. “These Thai tycoons have outgrown their domestic market and now want to expand in the region.”

— With assistance by Liza Lin

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