Counter offer for F&N
Overseas Union Enterprise, Kirin in talks for rival takeover bid
A Singapore hotel and property firm backed by Indonesia’s Lippo Group may team up with Japan’s Kirin Holdings to thwart a US$7.2bil takeover offer for Fraser and Neave Ltd from companies linked to Thailand’s third richest man, sources said.
In an unexpected move, Overseas Union Enterprise Ltd (OUE) said yesterday it was seeking partners in a potential takeover bid for F&N, without identifying the parties. Kirin Holdings Co Ltd is one of the companies involved in the preliminary discussions, said the sources, who spoke on condition of anonymity because the talks were private.
Kirin Holdings, F&N’s second biggest shareholder, said this week it was considering all possible options for its stake in the Singapore beverage and property conglomerate. The Japanese brewer declined to comment on the OUE talks.
OUE’s approach may force the Thais to raise their S$8.88pershare offer, which F&N had described as “not compelling but fair.”
Shares in F&N jumped 3% to S$9.20 after trading of the stock resumed on Friday afternoon. The shares have been trading above the Thai offer and are up 47% so far this year.
“This will definitely complicate the Thai bid because the S$8.88 offer that they put on the table has already met some scepticism from some shareholders as well as some of the F&N directors,” said Goh Han Peng, an analyst at DMG & Partners Securities.
The fight for F&N’s businesses has shifted to the group’s property portfolio, worth more than S$8bil (US$6.56bil), after F&N agreed last month to sell its nearly 40% stake in Tiger beer maker Asia Pacific Breweries Ltd to Heineken NV.
Earlier in October, F&N rebuffed a S$1.4bil offer for its hospitality and serviced apartments unit.
Sources said OUE was behind the bid.
“From OUE’s perspective, the attraction from F&N side is the property side. They might tie up with a third party like a food and beverage player as such a partnership would be complementary for both,” Goh said, adding that potential partners could be Kirin or CocaCola Co.
Kirin had said previously it was interested in F&N’s food and nonalcoholic drinks business.
The companies linked to Thai billionaire Charoen Sirivadhanabhakdi are collectively F&N’s largest shareholder with a nearly 34% stake. Kirin owns almost 15%.
“OUE wishes to state that it is in discussions with certain parties and is considering all options with respect to F&N, including an offer for F&N shares,” the Singaporelisted company said in a statement.
Forbes magazine, on its Indonesia rich list published last November, ranked Lippo Group patriarch Mochtar Riady at No. 38 with an estimated net worth of US$650mil.
The Lippo group comprises private and public companies in China, Indonesia, the Philippines, Singapore and South Korea with US$11bil in assets.
“Given the significant value in F&N, especially its property assets and its strong F&B franchise in Malaysia and Singapore, it would make sense for the Lippo group to make a counter offer,” Jit Soon Lim, an analyst at Nomura, said in a report.