Mergers & Acquisitions

Charoen close to winning F&N battle

Thai billionaire heads for victory in fight for Fraser & Neave as rival declines to match bid

PUBLISHED : Tuesday, 22 January, 2013, 2:37pm
UPDATED : Wednesday, 23 January, 2013, 2:17am

Thailand's richest man has come closer to winning control of Fraser & Neave after a rival group failed to top his S$13.8 billion (HK$87 billion) offer for the 130-year-old property and beverage company.

A group led by Overseas Union Enterprise (OUE) said on Monday it would not match Charoen Sirivadhanabhakdi's January 18 offer of S$9.55 a share. The group had bid S$9.08 a share in November last year.

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. He has built a 40 per cent stake in F&N in his push to win the biggest takeover of a Singapore-based company.

"It's all over," said Jonathan Foster, a 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 still needs to gain the support of a majority of shareholders.

F&N shares, which last traded at S$9.55 yesterday, have gained 22 per cent since Charoen announced his initial investment in the company on July 18, three times the gain in the benchmark Straits Times Index.

Beer maker Thai Beverage, which owns shares in F&N, is controlled by Charoen. Charoen's offer values the company at S$13.8 billion, and he would pay about S$8.3 billion for the 60 per cent he does not 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."

Charoen agreed to buy a 22 per cent stake in F&N in July, sparking a fight for its assets. He offered S$8.88 a share in September. His latest offer will remain open until February 4, F&N said.

The billionaire bid for the rights to operate distilleries during a liberalisation of Thailand's liquor industry, before expanding into beer, alcohol, sugar, and packaging businesses.

Charoen's unlisted business, TCC Group, has a property unit. Thai Beverage, which sells Chang brand beer, gets almost all its revenue from its home market.