New Heineken bid lifts Asia-Pacific Breweries to new high

Charmian Kok

SINGAPORE, Aug 21 (Reuters) - Shares of Asia Pacific Breweries Ltd (APB) soared to a record in Singapore trading on Tuesday after Dutch brewer Heineken sweetened its offer for the maker of Tiger Beer to $6.35 billion.

Heineken, which raised its offer for Singapore conglomerate Fraser and Neave’s stake in APB to S$53 a share last week from S$50, is seeking control of the brewer to gain a larger slice of one of the last beer markets that is still growing rapidly.

The Dutch brewer’s new offer puts the spotlight back onto APB’s other suitor Thai billionaire Charoen Sirivadhanabhakdi, who is looking to expand the empire of Thai Beverage in Southeast Asia.

Thailand’s second-richest man had thrown a spanner in Heineken’s plans after his son-in-law’s company Kindest Place offered to buy F&N’s direct stake of 7.3 percent in APB for S$55 a share.

“All eyes will be on Kindest Place or ThaiBev’s next moves, but we believe a competing offer for APB by Kindest is unlikely given the financial resources required,” said DMG & Partners analyst Goh Han Peng in a note.

Heineken’s latest offer gained the approval from F&N’s board and came with commitment from F&N not to solicit, engage in talks or accept any alternative offer or proposal for its interests in APB.

“The sale of F&N’s stakes in APB in its entirety to Heineken at the improved price would better maximise overall returns for F&N shareholders,” F&N Chairman Lee Hsien Yang said in a statement on Saturday.

 By 0205 GMT, APB shares jumped 4.8 percent to a record S$53.00, with over 2.2 million shares traded, making it the top traded stock in Singapore. F&N shares were slightly lower at S$8.39.

 F&N, which stands to gain S$4.77 billion from the disposal of APB, could pay out special dividends and see upside in its stock from reinvestment, CIMB Research said.

 However, the conglomerate’s earnings will likely decline if APB is sold, Nomura said, adding that the beer maker accounted for about 48 percent of the group’s earnings for the nine months ended June.