Heineken’s resolve to buy out APB tested by the Thais
SINGAPORE, Aug 8 – Heineken’s resolve to buy out Asia Pacific Breweries Ltd (APB), the maker of Tiger Beer, is being tested by a group linked to Thailand’s second-richest man as the fight for a bigger slice of the world’s last growing beer markets intensifies.
The surprise counter-offer by a company owned by Charoen Sirivadhanabhakdi’s son-in-law to acquire Fraser and Neave’s direct stake in APB surpassed Heineken’s bid by 10 per cent. It was the second time the Thai billionaire has put the world’s third-largest brewer in a spot.
Last month, companies controlled by Charoen paid US$3 billion (RM9.31 billion) for stakes in Singapore-listed F&N and APB, prompting Heineken to launch a US$6 billion bid for F&N’s direct and indirect stakes in APB. Heineken already controls about 42 per cent of APB, mostly through a joint venture with F&N.
“If push comes to shove, Heineken would have to raise its offer for APB,” said Roger Tan, chief executive of SIAS Research. “(The Thais) did a very smart move. They only went in to say they want to buy F&N’s stake, so it allows them to be the spanner in the whole deal.”
Charoen and his companies, including Thai Beverage PCL, may seek greater control by making a general offer for F&N, Nomura said in a research note, potentially forcing Heineken to make a counter-offer for the Singapore food and property conglomerate.
If both parties clash in a bidding war, Heineken, with a market capitalisation of US$31.7 billion, may have the upper hand. The maker of Chang beer has a market value of US$6.7 billion.
Already, ThaiBev has taken out a S$2.8 billion (RM6.98 billion) loan facility to finance its purchase of Oversea-Chinese Banking Corp’s 22 per cent stake in F&N. It had 3.5 billion baht (RM345.19 million) in cash and equivalents at the end of 2011, a fraction of Heineken’s €827 million (RM3.20 billion).
However, analysts said it was hard to estimate how much funds Charoen’s other non-listed companies have in their war chest.
BATTLE FOR TIGER BEER
Both the Thai and Dutch companies are vying for greater influence over F&N’s crown jewel APB, due to its dominant position in fast-growing emerging markets in Southeast Asia.
For Heineken, control of APB is crucial as this will raise the proportion of its total profits from Asia to 15 per cent from 6 per cent.
With APB, Heineken gets ownership of Tiger, Bintang, Anchor and other brands of beer plus two dozen breweries in 14 countries including Singapore, Malaysia, Indonesia, Vietnam, Thailand and Cambodia.
If it sits still, Heineken could face opposition to its investments and growth in the region, notably in Thailand, where ThaiBev’s beers such as Chang are rivals.
APB shares jumped to a record of S$52.20 earlier today. F&N shares rose 2.8 per cent to S$8.51, and have surged 37.3 per cent this year.
The Amsterdam-based brewer put a brave face on the situation late yesterday, saying its bid was better than the Thai offer.
“We are convinced that our bid is richer and offers more value to shareholders,” said a Heineken spokesman.
Its response came after Kindest Place Groups, a company owned by Charoen’s son-in-law, made an offer of S$55 a share to buy F&N’s direct stake in APB on Tuesday, S$5 a share more than what Heineken agreed to pay in its deal announced last week.
If the latest Thai offer succeeds, it will control about 16 per cent of APB, having already agreed to buy 8.6 per cent of the beer maker from OCBC and its affiliated groups at a lower price of S$45 a share.
ThaiBev is F&N’s biggest shareholder with about 24 per cent. Japan’s Kirin Holdings is the second-largest with a 15 per cent stake. – Reuters