Thais set to win F&N battle after Overseas Union bows out

Tue Jan 22, 2013 1:43am EST
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By Eveline Danubrata and Saeed Azhar

SINGAPORE (Reuters) - Thailand's third-richest man is set to take control of Fraser and Neave Ltd (F&N) in Southeast Asia's biggest-ever acquisition after a group led by an Indonesian tycoon bowed out of a two-month bidding war for the Singapore drinks and property company.

The group led by Stephen Riady's Overseas Union Enterprise Ltd (OVES.SI: Quote) threw in the towel on Monday after Thailand's TCC Assets Ltd, headed by billionaire Charoen Sirivadhanabhakdi, raised its takeover offer for F&N (FRNM.SI: Quote). At stake is F&N's real estate portfolio worth more than S$8 billion ($6.52 billion) and soft drinks, dairy and publishing businesses.

Charoen currently owns 42.5 percent of F&N, held through TCC Assets and Thai Beverage PCL (TBEV.SI: Quote). His S$9.55-a-share offer last week for F&N stock that he does not already own values the Singapore conglomerate at around S$13.75 billion ($11.2 billion). F&N shareholders have until early next month to accept or reject the offer.

"Once its offer becomes unconditional, we are likely to see TCC move to integrate its F&B (food and beverage) operations with F&N's. In addition, it will also look to leverage F&N's regional and global property franchise," said Jit Soon Lim, Nomura's head of equity research for Southeast Asia.

Lim added that Charoen may sell F&N's printing and publishing business, which he estimated to be worth around S$320 million.

Charoen's interest in F&N's assets was first made public when his companies became F&N shareholders in July last year and sought to purchase F&N's stake in Tiger Beer maker Asia Pacific Breweries Ltd. But he lost that battle when F&N sold the stake to Dutch brewing giant Heineken NV (HEIN.AS: Quote) for S$5.6 billion in September.

The self-made billionaire, who is a son of a Bangkok street vendor, quickly followed up with a S$8.88-a-share offer for the rest of F&N, with the Singapore group still deemed an attractive asset.

F&N is the leader in the soft drinks markets in Malaysia and Singapore, with a 31.3 percent and 21.4 percent market share, respectively, according to research firm Euromonitor. It also has a 55 percent stake in Myanmar Brewery Ltd, a joint venture that produces Myanmar Beer, the Southeast Asian country's best-selling beer.   Continued...

A security guard walks past a logo of Fraser and Neave Limited at its office building in Singapore January 21, 2013. Thailand's third-richest man has raised his stake and takeover offer for Fraser and Neave Ltd to fend off a bid by a group led by Indonesian tycoon Stephen Riady as the battle for the Singapore property and drinks group draws towards a close. REUTERS/Edgar Su (SINGAPORE - Tags: BUSINESS LOGO)