Wednesday, 1 August 2012

Singapore's F&N, APB shares halted ahead of Heineken offer decision

(Reuters) - Shares of Fraser and Neave (F&N) (FRNM.SI) and Asia Pacific Breweries (APB) (APBB.SI) were suspended on Thursday from trading, after sources said F&N is pressing for a better offer for its stake in APB than the $4.1 billion offered by its partner Heineken NV (HEIN.AS).
The Dutch brewer and F&N are embroiled in a tussle over APB, the producer of Tiger Beer. Heineken moved to protect its interests in APB by offering F&N $4.1 billion to take effective control of APB. It will then have to offer another $2 billion in a public tender for minority stakes in the company.
Heineken's move came after companies linked to Thai tycoon Charoen Sirivadhanabhakdi bought stakes in both F&N and APB for $3 billion last month. Thai Beverage PCL (TBEV.SI), controlled by Charoen, has since raised its stake in F&N to 24.1 percent, according to stock exchange filings.
Coca-Cola Co (KO.N), the world's largest soft-drinks maker, is exploring a bid for the beverage unit of Singapore's F&N, Bloomberg reported on Wednesday, citing several people with knowledge of the matter.
A source familiar with the situation told Reuters Coke "is showing a lot of interest in this." Banking sources have said a bid for the beverage business is only possible if F&N is broken up.
F&N and Coca-Cola ended last year their partnership under which F&N used to bottle and sell Coca-Cola's drinks in Malaysia, while Coca-Cola did the same for F&N in Singapore.
The bulk of the food and beverages business is locked up in Malaysian listed entity Fraser and Neave (FRAS.KL) which has a market value of about $2.2 billion.
Heineken extended on Friday its bid for F&N's APB stake by one week, and sources told Reuters F&N's board is pressing for a better offer for the stake.
"Heineken is the one with the bigger muscle, they're the stronger party but they definitely have to come up with an offer that no one can resist, so the question is what is that price? Heineken has to test it out," said Roger Tan, CEO of SIAS Research.
Singapore-based brewer APB, the crown jewel in the F&N stable, is attractive to other beer companies due to its foothold in the fast-growing Asian market.
European analysts say the deal would increase the proportion of Heineken's profits from the Asia-Pacific region to 15 percent from 6 percent, raising the growth rate of the whole group.
F&N shares have jumped 31.5 percent so far this year to close at S$8.15 on Wednesday, but have come off a record high of S$8.49. APB shares, which last traded at S$49.50, have surged 71.9 percent since the start of the year.
Thai Bev this week obtained a key waiver from the Singapore Exchange that will accelerate its move to become the biggest shareholder of F&N, owning 24.1 percent stake, ahead of 15 percent owned by Japan's Kirin Holdings (2503.T). ($1 = 1.2443 Singapore dollars)

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