Fraser & Neave Declines $1.1 Billion Bid for Part of Business

--Unsolicited offer is for company's hospitality and serviced-residence assets

--Singapore law forbids F&N from selling significant asset during takeover bid

--F&N already target of $7.2 billion takeover bid by Thai tycoon Charoen Sirivadhanabhakdi

SINGAPORE--Fraser & Neave Ltd. (F99.SG), the Singapore conglomerate targeted in a takeover bid by a Thai billionaire, said Wednesday that it has declined a 1.4 billion Singapore dollar offer ($1.1 billion) from an unnamed third party to buy its hospitality and serviced-residence businesses.

F&N, which owns property, food and beverage, and publishing assets, won't respond to the unsolicited offer as it sees those assets as integral to its real-estate arm, the conglomerate said in a statement. Also, under Singapore law, the target of a takeover can't sell any significant asset during the bid.

F&N, fresh from agreeing last month to sell its prized beer joint venture to partner Heineken NV (HEIA.AE), is already mulling a $7.2 billion offer from Thai tycoon Charoen Sirivadhanabhakdi to buy the part of the Singapore group that he doesn't already own.

These bids have stoked market speculation in recent months that F&N could be broken up by business rivals swooping into to buy the conglomerate's various assets piecemeal. Among them, Japanese beverage giant Kirin Holdings Co. (2503.TO)--F&N's second-largest shareholder with nearly 15%--has expressed interest in its food and beverage assets.

Mr. Charoen made his move for F&N last month using an unlisted special purpose vehicle, TCC Assets Ltd. His offer values the Singapore firm at S$12.53 billion. As of Tuesday, the Thai tycoon owns 33.17% of F&N through Singapore-listed Thai Beverage PCL (Y92.SG) and TCC Assets.

Mr. Charoen's initial focus was on F&N's beer assets, but now he is eyeing the company's property portfolio and a regional distribution network driven by its soft-drinks business, according to people familiar with the Thai tycoon. Mr. Charoen's TCC Group has business interests spanning beverages, property and consumer products, among others.

F&N's financial advisers are expected to issue their advice on Mr. Charoen's offer by Thursday.

Write to Chun Han Wong at [e-mail]

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