F&N’s Chairman Lee ‘Disappointed’ OUE Backed Off on Higher Offer

Fraser & Neave Ltd.’s chairman said he was “disappointed” Overseas Union Enterprise Ltd. failed to challenge Thai billionaire Charoen Sirivadhanabhakdi’s S$13.8 billion ($11.2 billion) bid for the property and drinks company.

A planned auction for F&N may have resulted in greater value for the company, Chairman Lee Hsien Yang said at a shareholder meeting yesterday. Charoen is poised to win control of F&N after the rival bidding group led by OUE failed to match his S$9.55 a share offer.

The OUE-led group on Jan. 21 said it would not raise an earlier bid of S$9.08 a share. Singapore regulators had said they would hold an auction for the 130-year-old property company in case of an stalemate between the two companies.

“We were disappointed” that the OUE-led group chose not to bid, Lee said at the meeting, which was attended by more than 300 shareholders. Lee is the younger brother of Singapore’s Prime Minister Lee Hsien Loong.

Charoen’s TCC Assets, while announcing a raised bid of S$9.55 a share on Jan. 18, also said it had boosted its stake in the conglomerate.

TCC’s purchase of the 6.3 percent stake surprised the market and created a clear gap with OUE, Lee said.

Lee and three other directors have said they plan to sell their shares to TCC after adviser JPMorgan Chase & Co. called the Thai offer “fair.” The company said yesterday its board plans to resign when TCC’s bid becomes unconditional.

Charoen’s TCC boosted its F&N stake ahead of the official start of the auction by buying 90.8 million shares at S$9.55 each. Two attendees at the meeting asked why shareholders would sell at that price, which was below where the stock had been trading at that time.

“It does not seem a logical thing to do,” Lee said of the decision by institutions to sell then, referring to the thin trading volume and higher average share price of F&N over the previous month. TCC in a Jan. 19 statement said it had bought shares from unrelated parties.

TCC owns 46.13 percent of F&N, it said yesterday. Its offer is due to close at 5:30 p.m. Singapore time on Feb. 4.

Kirin Holdings Co., which has a 15 percent holding in F&N, will choose the option with the best value for its shareholders, the Japanese brewer’s managing director Hirotake Kobayashi said yesterday after the same meeting.