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Asian Tiger ThaiBev poised to pounce on F&N?

By Ben Bouckley , 11-Sep-2012

Asian Tiger ThaiBev poised to pounce on F&N?

ThaiBev said today it is exploring the possibility of making an offer for Fraser & Neave (F&N) with an unnamed third party, in a move that could still disrupt Heineken’s multi-billion dollar move for Asia Pacific Breweries (APB).

Dutch giant Heineken has almost breasted the ticker tape in its bid to buy F&N’s 39.7% stake in brewer APB for S$53/share, with shareholders due to vote on its S$5.6bn ($4.54bn) offer on September 28.

Today, ThaiBev management issued a holding announcement referencing a Singapore Business Times article from yesterday, stating that it was seeking funds to mount an offer for Fraser & Neave (F&N).

ThaiBev, Kirin, Coke…

ThaiBev management said it was not seeking funding for a potential general offer for F&N, but added: “The board understands that a party acting in concert with the company is exploring the possibility of making an offer for F&N.”

On August 2 we reported that either Coca-Cola or Japan’s Kirin Holdings could be interested in F&N’s wider beverage arm, F&N Holding (2011 turnover: $S759m) following the sale of APB.

Today, we asked one Singapore-based analyst if ThaiBev’s latest move could upset Heineken’s APB bid, or whether the Thai firm and partner wanted F&N’s significant non-beer (soft drinks, dairy, property) interests instead, as suggested by a Reuters article today quoting sources close to ThaiBev.

SIAS Research lead analyst, Ng Kian Teck told that ThaiBev’s true intentions in this respect were “anybody’s guess”, but said it could just be targeting F&N’s non-alcoholic drinks arm.

ThaiBev now holds a 29% stake in F&N (including a block of APB shares) and stands to gain significantly (by at least around US $1bn) if it accepts Heineken’s APB offer at the end of this month.

ThaiBev beer hopes remain?

But could today’s announcement threaten Heineken’s bid? “Really it depends, on whether ThaiBev manages a buy out before F&N get official acceptance of Heineken’s offer on the APB side,” Teck said.

“Before that happens, if ThaiBev actually makes the move to buy out F&N, I think there is still this possibility for them to hope and chase [APB].”

In today’s holding announcement, ThaiBev did not disclose whether the third party came from within its chairman’s (Thai billionaire Chareon Sirivadhanabhakdi’s) wider TCC Group empire.

“Shareholders of the company and F&N should note that there is no certainty that an offer for F&N will materialize,” management wrote.

“Accordingly, shareholders of the company and F&N are advised to refrain from taking any action in relation to their shares in the company and F&N (as the case may be) which may be prejudicial to their interests," it added.

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