Thailand's Charoen May Counterbid for Siam Makro -Sources

   By Prudence Ho and P.R. Venkat 
 

HONG KONG--Thai billionaire Charoen Sirivadhanabhakdi appears to be back in the fray for a high-profile acquisition just months after paying billions for a Singapore property group. Mr. Charoen is tapping banks for funding to launch a counterbid for Thai discount store operator Siam Makro PCL (MAKRO.TH), people with direct knowledge of the matter said Wednesday.

But he isn't likely to submit a bid unless he can get enough funding to beat one, for $6.6 billion, made Tuesday by Thailand's wealthiest man, Dhanin Chearavanont, the people said. Mr. Charoen, Thailand's third-richest man, is trying to raise financing but sees Mr. Dhanin bid as highly valued, they said.

Mr. Dhanin is raising the bulk of the funds to finance the Siam Makro deal from banks.

Mr. Dhanin's bid for the membership-based discount chain he himself owned until the Asian economic crisis of the late 1990s would be Asia's biggest merger so far this year.

Mr. Dhanin's offer, through his CP ALL convenience store, values Siam Makro at 53 times its 2012 earnings, or 45 times analysts' forecast 2013 earnings. In contrast, Thailand's benchmark SET Index is trading at 17.6 times earnings.

A spokesman at TCC Assets, the property unit owned by Mr. Charoen that is tapping the banks, declined to comment.

Both Mr. Dhanin and Mr. Charoen have track records of funding big deals with debt. Early this year, Mr. Choroen won a bidding war for Singapore's Fraser & Neave Ltd. (F99.SG), with debt accounting for most of the $11.2 billion price tag of the real estate and soft drinks firm. He received financing to back the deal, Asia's largest M&A transaction last year, from a group of banks including United Overseas Bank and DBS Bank.

Mr. Dhanin paid $9.4 billion for a stake in Ping An Insurance (Group) Co. (2318.HK) in a deal that closed earlier this year and was largely funded by UBS AG.

--Isabella Steger and James Hookway contributed to this article.

Write to Prudence Ho at [e-mail] and P.R. Venkat at [e-mail]

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