TCC extends F&N bid yet again

SINGAPORE - TCC Assets, the family company of Thai whiskey magnate Charoen Sirivadhanabhakdi, yesterday extended for the fourth time a deadline for its S$8.8 billion bid for full control of the Singapore property, publishing and food and beverage conglomerate Fraser & Neave.

The closing date for the S$8.88 a share bid now falls on Jan 2, a day before a higher bid of S$9.08 per share by Overseas Union Enterprise (OUE) - controlled by Indonesia's Riady family - is due to expire.

Under Singapore's Code on Takeovers and Mergers, an offer normally has to be finalised within 60 days of the initial offer, which in TCC's case was Sept 13. 

But the Securities Industry Council has the authority to grant an extension in special circumstances, such as when a competing bid is made, and it has been about one and a half months since OUE made its rival bid.

What surprised many market observers was that there was no attempt by the Thais to better OUE's offer, thereby making it unlikely that any other F&N shareholder will sell his stake to TCC.

TCC, together with its listed vehicle Thai Beverage, is F&N's largest shareholder with a 35.68-per-cent stake, inclusive of 2.02 per cent in acceptances that becomes ownership only after the 50-per-cent mark is achieved.

"What's the point of extending the deadline without upping the OUE offer? And how will OUE respond to the extension?" asked an exasperated shareholder, who said both offers were inadequate.

Many think the bid for F&N has to be at least S$9.50 a share before new acceptances come in. 

The independent advisers to F&N's board have found TCC's offer "not compelling, though fair". 

Nomura Securities analyst Lim Jit Soon, who has a target price of S$10.48 on F&N, thinks that OUE could bid as high as S$9.88 a share.

Japanese beer maker Kirin Holdings, which has a 14.8-per-cent stake in F&N, has agreed to tender its shares to OUE, which is largely focused on office and hotel ownership and development. Kirin has also offered to buy over F&N's food and beverage business for S$2.7 billion should the Riadys succeed.


Article above taken from TODAYonline. Article by Conrad Raj

Heineken's final $53 offer.

Well it seems that Heineken has shown their hands now. There is also a minuscule break fee of US47 million. (Not that it matters in this case)  The final act depends on Thai Bev.

Lets do a rewind and start from the beginning.

ThaiBev bought a 22.2% of F&N for $8.88 and 8.6% of APB for $45.

This translates to an investment of roughly S$2.8 billion for the F&N Stake. Thai Beverage has continued to buy in the open markets another 4% of the stock and it cost them roughly another S$500 million. Total investment is S$3.3 billion.

For the APB stake, it was bought by the son in-law of Mr Charoen, for the 8.6% it cost them roughly S$1 billion. If they flip it to Heineken now, they will net a profit of roughly a cool S$170 million. That is like a 17% return.

However in the grand scheme of things, they have invested up to S$4.3 billion till now. Will they cash out now on APB for a 17% return for 4 months ( have to hold it till deal completion by end of the year)? Why did they increase their stakes in F&N these pass few weeks?

The Charoen's initially took out S$1 billion to buy the stakes ( + S$2.8 billion loan facility). They have since invested another $500 million into F&N shares. So their total investment is $1.5 billion cash + $2.8 billion loan. By agreeing to Heineken's latest deal, F&N will get about S$5.5 billion. That equates to roughly $3.80 per share and S$1.4 billion for Thai Beverage's stake of 26.2% if a special dividend is paid out. Mr Charoen's son in law will also get back S$1.17 billion.

In this case they will both get back roughly S$2.57 billion. This means they will have an additional cash of S$1 billion (the loan facility of S$2.8 billion remains without change). Seems like a good deal. If the Charoens have the money to take over APB, it would have put in an offer for all APB shares. Instead they have proven that they are just there to be a "major" nuisance in building up a minority presence.

I would believe Heineken's offer would be accepted unless of course Mr Charoen continues in bulding up his stake in F&N.

Thai Bev bids $55 for 7.3% of Asia Pacific Breweries

Thai Bev has made an unsolicited bid for 7.3% of APB's shares. It will be interesting to see what follows. As presumed, Thai Bev would make it harder for Heineken to buy APB, but the question is will Thai Bev be able to take over APB fully or are they just looking to build a blocking stake looking for a better bid.

To me it seems like the latter is possibly. Or possibly they want to protect their interest as they have just spend a fortune buying over the F&N stake from OCBC and company. But will Heineken bite?

It definitely looks more interesting now as Thai Bev have shown their hands. I would want to think Heineken wouldnt walk away so fast, thus there should be 1 bid left by Heineken. Lets see where this opens tomorrow.