Thai Beverage to Make Offer for Fraser & Neave

Thai Beverage PCL (Y92.SG) and its partner, TCC Assets, on Thursday said it will make a mandatory general offer to buy Fraser & Neave Ltd. (F99.SG) valuing the Singapore-based conglomerate at 12.53 billion Singapore dollars ($10.2 billion), a move that could upset Heineken NV's (HEIA.AE, HINKY) plans to gain control of F&N's stake in beer maker Asia Pacific Breweries (A46.SG).

ThaiBev and TCC Assets, both controlled by Thai billionaire and tycoon Charoen Sirivadhanabhakdi, said they now own a 30.36% stake in F&N, which in turn has triggered a mandatory general offer for the whole of the Singaporean company that has businesses in beer, property, soft drinks and publishing.

In a filing to the Singapore Exchange, ThaiBev said it along with TCC Assets will offer S$8.88 a share to buy all the F&N shares it doesn't already own.

Thaibev's latest statement comes as shareholders of F&N are set to meet Sept. 28 for a crucial vote to approve Heineken's bid to buy F&N's entire 39.7% stake in Asia Pacific Breweries. Last month, the board of the Singaporean conglomerate had agreed to recommend Heineken's sweetened $4.5 billion offer to shareholders.

"We believe the offer represents an opportunity for F&N shareholders to realize the value of their investment in cash and to make a complete exit from F&N," Thapana Sirivadhanabhakdi, president and chief executive of ThaiBev, said in a statement.

This latest move by the entities of Mr. Charoen will upset Heineken's plans to consolidate its position in the fast-growing Asia beer market, as full control of Asia Pacific Breweries would significantly boost the Dutch company's exposure to high-growth, developing economies at a time when it is struggling with weakness in Europe.

F&N and Heineken share an 81-year-old, 50-50 joint venture that owns 64.8% of Asia Pacific Breweries. F&N also owns a 7.3% direct stake in Asia Pacific Breweries, while Heineken directly owns 13.94% of the company after acquiring shares from the market in recent weeks.

A full control of Asia Pacific Breweries would see Heineken owning the Tiger and Bintag APB beer brands that have nearly 50% of the beer market in Indonesia, Malaysia and Singapore, according to data provider Euromonitor. Asia Pacific Breweries has 30 breweries and 40 brands spanning 14 Asian countries. It also brews Heineken beer for some markets in the region.

Heineken needs a simple majority of F&N shareholders to vote in favor of its offer for Asia Pacific Breweries.

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

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