Thai Billionaire Comes Back With A Surprise Offer For Fraser and Neave

The Thai billionaire, Charoen Sirivadhanabhakdi, began a $7.3 billion takeover bid for the 70 percent stake in the Singaporean conglomerate Fraser and Neave Limited (SGX:F99). The all cash deal is 4.3 percent above the Fraser & Neave’s closing stock price on Wednesday. The deal, if it goes through, will put an end to the dreams of the Dutch brewer Heineken N.V. (AMS:HEIA) to spread its network in the Asia region.

Thai Billionaire Comes Back With A Surprise Offer For Fraser and Neave

“We believe the offer represents an opportunity for Fraser and Neave Limited (SGX:F99). shareholders to realize the value of their investment in cash, and to make a complete exit,” Thai Beverage’s chief executive, Thapana Sirivadhanabhakdi, the son of Mr. Charoen, said in a statement.

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Thai Beverage Public Company Limited (SGX:Y92) and Heineken, have been battling for the control of Asia Pacific Breweries, the beer business jointly owned by the Dutch company and Fraser and Neave Limited (SGX:F990). Charoen agreed to buy a stake in F&N in July, countering the bid, Heineken moved for a 40 percent stake in APB, which the Dutch brewer already partially owns. The billionaire still has not come up with a rationale of the present offer, which comes ahead of a Sept. 28 meeting, where F&N shareholders will vote on Heineken’s proposal.

“There’s a prospect that someone can come in with a better offer,” Justin Harper, a Singapore-based market strategist at IG Markets, said in a phone interview. “There’s also the prospect that if Charoen takes over F&N they will unlock a lot more value by breaking the company up.”

Heinkein now will have to go for the counter offer for F&N, either by itself, or with a partner. The world’s third-largest brewer, has the smallest presence in developing regions, such as Asia and Latin America, among the world’s big three brewers. The Dutch Brewer has already once revised its offer for APB to S$53 a share from S$50.

“Giving up is out of the question,” one analyst said. “If Heineken N.V. (AMS:HEIA) makes an offer with another party, the possibility of a break-up is higher.”

On the other hand, having a controlling stake in Fraser and Neave Limited (SGX:F99) would widen Charoen’s influence in Asia. The billionaire, who already owns a 29 percent stake in F&N, earned almost all his revenue from Thailand in 2011. For months, Mr. Charoen has been portraying himself a main player to to decide the fate of Asia Pacific Breweries. Just last month, Thai Beverage increased its stake to 26.2 percent to become the largest shareholder. Kindest Place, a separate company controlled by the son-in-law of Mr. Charoen, also bought an 8.6 percent direct stake in Asia Pacific Breweries.

Heineken N.V. (AMS:HEIA) fell 0.5 percent to 42.76 euros in the early trading session in Amsterdam, dropping for a fourth day in five, while the shares of Thai Bev were unchanged.