(Reuters) - Singapore’s Fraser and Neave Ltd FRNM.SI set a Sept 28 vote for shareholders to approve the sale of a 40 percent stake in Asia Pacific Breweries Ltd to Heineken, saying the Dutch brewer had a right of first refusal on most of the APB shares that made its offer the best deal in a takeover battle.
APB APBB.SI, the maker of Tiger Beer, has been the object of a seven-week bidding battle between the world’s third-biggest brewer, Heineken NV HEIN.AS, and Thai Beverage PCL TBEV.SI, controlled by Thailand’s second-richest man, Charoen Sirivadhanabhakdi.
Heineken, which already controls about 46.2 percent of APB, has offered S$7.9 billion ($6.3 billion) to take over the Singapore-listed brewer. Heineken holds a direct interest in APB of nearly 13.8 percent and a 32.4 percent stake through its joint venture with F&N.
Thai Beverage, F&N’s largest shareholder with 29 percent, may vote against the sale.
In a letter to shareholders, F&N said Heineken had first right of refusal to the 65 percent of APB shares held by F&N-Heineken joint venture Asia Pacific Investment Pte Ltd (APIPL). This right of refusal had not been explicitly stated previously.
“Under the constitutional documents of APIPL, if the company proposes to transfer the APIPL sale shares to a third party, it would first have to offer the APIPL sale shares to the Heineken JVA parties at a price to be agreed, failing that, at a valuation to be determined by a pre-agreed formula,” F&N said.
“Such valuation would be substantially lower than the consideration offered by Heineken for the APIPL sale shares. Given these constraints, the board would not be able to accept any offer from a third party for the APIPL sale shares even if it were higher than Heineken’s current offer.”
F&N shareholders would also be asked to vote on the proposed cash distribution of S$4.0 billion if the sale to Heineken goes ahead. Last month, Heineken had raised its offer for the APB stake to fend off Thai Beverage.
“Heineken’s improved offer represents the best opportunity for the group to immediately realize the value of our interests in APB,” F&N Chairman Lee Hsien Yang said in a statement.
($1 = 1.2479 Singapore dollars)
Reporting by Eveline Danubrata and Kevin Lim in Singapore and Chris Jonathan Peters in Bangalore; Editing by Maju Samuel and John Mair