Charoen guns for takeover of century
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Tycoon may offer S$9 billion for the takeover of Fraser and Neave; rival Heineken reviewing latest move
Thai tycoon Charoen Sirivadhanabhakdi looks poised to launch Singapore’s largest-ever takeover by tabling a 9-billion Singaporean dollar (Bt227 billion) bid for Fraser and Neave either today or tomorrow.
Charoen’s Thai Beverage (ThaiBev) has already spent S$3.6 billion to get 29 per cent of F&N so the new outlay would bring the spending to S$12.6 billion – beating the S$10 billion that United Overseas Bank paid for Overseas Union Bank in 2001.
Sources said the billionaire has secured funding, including from Singapore banks, for the F&N bid.
Charoen had not found an external partner as of last night and so is relying on his own business entities to launch the takeover.
The tycoon, named by Forbes as Thailand’s third-richest man with a net worth of US$6.2 billion (Bt192 billion), controls the unlisted Thai conglomerate TCC Group, which has interests ranging from property to consumer goods.
Charoen also controls ThaiBev, which makes Chang Beer, through the group.
“He [Charoen] is trying to get a partner but, if that fails, he will launch a general offer on his own,” a source said.
ThaiBev’s president and CEO, Thapana Sirivadhanabhakdi, who is Charoen’s son, said in a statement yesterday, “We believe the offer represents an opportunity for F&N shareholders to realise the value of their investment in cash and to make a complete exit from F&N”.
Singapore takeover rules state that a general offer price must be at least S$8.88 per share – the highest price ThaiBev has paid for F&N stock in the past six months.
That means Charoen’s vehicle will need to pay about S$9 billion at least for the 71 per cent of F&N he does not own.
Charoen wants to keep the brewery assets of F&N, The Straits Times understands.
A takeover of F&N could then stymie a S$5.4-billion bid by Heineken to buy F&N’s stake in Asia Pacific Breweries. F&N shareholders vote on that deal on September 28.
With ThaiBev holding a 29-per-cent stake in F&N, Charoen would already have had a large say in the vote. His influence will increase if he launches an offer and sweeps up more shares before the meeting.
Charoen is thought to be open to selling other units of F&N – a move that could see the venerable Singapore conglomerate’s different businesses such as property, drinks and publishing being split up into separate entities.
“If it’s too big to chew, he will dispose of some [F&N] assets later,” the source said.
Charoen is in Singapore for “business meetings”. The Straits Times understands that he arrived on Tuesday, spent Wednesday in discussions and could leave as early as yesterday. His son Thapana is also in Singapore.
The billionaire is staying at the InterContinental Singapore at Middle Road, which is owned by TCC Land, the property arm of his conglomerate, TCC Group.
Vichate Tantiwanich, senior vice president at ThaiBev, said Charoen is in Singapore for “normal business meetings”, with many items on the agenda, including the situation at F&N.
Vichate declined to specify if the talks were about a possible takeover or the normal operations of F&N. He also declined to comment on whether a bid for F&N was imminent.
ThaiBev said early on Tuesday morning that a party “acting in concert” with it is exploring a possible offer for F&N.
ThaiBev did not name the party but TCC Group or TCC Land was tipped as a possibility.
Heineken needs approval from F&N shareholders to complete its offer for Singapore-based F&N’s 40-per-cent stake in Tiger beer-maker Asia Pacific Breweries.
Purchasing F&N would widen Charoen’s influence in Asia and help ThaiBev diversify overseas. The Thai brewer got 96 per cent of its revenue from its home country last year, according to data compiled by Bloomberg.
Heineken said in a statement that it was reviewing ThaiBev’s latest move. It had no other comment.
The Dutch brewer last month raised its offer for a controlling stake in APB to nearly $4.5 billion after ThaiBev scooped up sizeable stakes in both APB and F&N.
Heineken currently has 41.9 per cent of APB through a direct 9.5-per-cent shareholding and an indirect shareholding of 32.4 per cent that is held through its joint venture with F&N. The Singapore conglomerate, which has been in business with Heineken for the past 80 years, owns 39.7 per cent of APB via the joint venture and a 7.3-per-cent direct stake.
Beer consumption has been growing rapidly in Asia as incomes rise, making the Tiger Beer brewer an attractive acquisition.
