Heineken Said In Talks With F&N To Raise APB Bid

Heineken NV (HEIA) is in talks with Fraser & Neave Ltd. (FNN) about raising its $6 billion bid for the rest of Asia Pacific Breweries Ltd. (APB), the maker of Tiger beer, said three people with knowledge of the matter.

It wasn’t immediately clear how much Heineken would boost its S$50 ($40) per share bid for APB, said two of the people, who asked not to be identified as the process is private. Kindest Place Groups, owned by the son-in-law of Thai billionaire Charoen Sirivadhanabhakdi, has offered to buy 7.3 percent of APB from F&N for S$55 per share.

The Dutch brewer has sought full control of the Tiger beer maker as it attempts to protect its hold over a key emerging-market business and as brewing assets in high-growth economies are in short supply after a decade of consolidation in the industry.

F&N owns 40 percent of APB while Heineken, the world’s third-biggest brewer, holds a 42 percent stake. The Dutch brewer has sought full control of the Tiger beer maker as it attempts to protect its hold over a key emerging-market business and as brewing assets in high-growth economies are in short supply after a decade of consolidation in the industry.

“At the end of the day, the F&N board needs to decide whether selling everything for S$50 is a better outcome for shareholders than selling 7.3 percent for S$55,” said Jonathan Foster, Singapore-based director of Global Special Situations at Religare Capital Markets. “It just depends on how that negotiation goes between Heineken and the F&N board, and how tough Heineken is able to play it.”
Asian Expansion

APB and F&N were both suspended from trading in Singapore today. Charoen’s Thai Beverage Pcl (THBEV) is unchanged at 33.5 Singapore cents as of 3:57 p.m. in the city-state, after rising as much as 1.5 percent. Heineken shares were down 0.35 percent to 43.64 euros at 10:23 a.m. in Amsterdam.
Heineken was spurred to make an offer for APB last month after Charoen’s Thai Beverage Pcl bid for a 22 percent stake in F&N. Kindest Place also agreed to buy about a 9 percent stake in APB at that time. The moves would potentially have infringed on the Dutch company’s influence over its brewing operations with APB, which has rights to brew Bintang beer in Indonesia, Anchor in China, Southeast Asia and Sri Lanka, and Heineken from China to New Zealand.

Heineken spokesman Charles Armitstead was not immediately available for comment. Reuters reported the talks earlier today, citing unidentified people. The Thai company may have put in the higher bid to get Heineken to raise its offer, Lee Syn Yi, a Singapore-based equity analyst at CIMB-GK Pte. Charoen’s family is already benefiting from a rise in APB’s stock. The value of Kindest Place’s 8.6 percent stake in APB has already risen by S$124 million based on the purchase price of S$45 a share.

Overseas Expansion
Thai Bev said last month that the F&N stake will allow it to expand its “non-alcoholic product portfolio” and to diversify geographically. The Thai brewer could also benefit from any dividends that F&N pays out from sale its stake in APB.

Deutsche Bank analyst Gregory Lui estimated in a July note that a sale of APB at S$50 a share could provide F&N and its shareholders “significant” one-time gains and special dividends of about S$2.71 a share.

Born and raised in Bangkok’s Chinatown district, Charoen started a trading business that supplied distilleries and became a distiller after being awarded concessions to produce liquor in Thailand.

‘Winner Both Ways’
“Thai Bev is a winner both ways,” said Jenai Chua, a Singapore-based analyst at Bank Julius Baer in an interview earlier this month. “If the APB sale goes through, they can still make a pretty big disposal gain should F&N decide to distribute proceeds of the sale to shareholders as dividend. If it doesn’t go through, they get a chunk of a very lucrative and well-established beer business.”

Trevor Sterling, analyst at Sanford C. Bernstein, said that Kindest Place was probably seeking to benefit financially from any increase in Heineken’s offer, and may try to influence APB strategy with a possible deal to cooperate in Thailand. “They probably have flexible objectives,” he said.

Heineken, which accounts for about 8.8 percent of the global beer market, is seeking to expand in faster-growing regions such as Southeast Asia amid weak consumer spending in the developed markets of Europe and the U.S. The company has the smallest presence in emerging markets among the world’s top three brewers, according to data compiled by Bloomberg. About 37 percent of operating income came from western Europe last year.

A sale of its stake in APB’s brewing business, could also draw acquisition interest in other parts of F&N, which also has soft drink and real estate operations. Japan’s Kirin Holdings Co. (2503) has said it is interested in F&N’s soft drink and food operations.

The purchases by Thai Beverage and Kindest were completed this week. Thai Beverage has since raised its stake in F&N to 26.4 percent.

ST ENGINEERING’S AEROSPACE ARM WILL NOT PROCEED WITH ACQUISITION OF PEMCO

Singapore, 6 August 2012 – Singapore Technologies Engineering Ltd (ST Engineering)
announced today that further to its announcement on 18 June 2012, Vision Technologies
Aerospace Incorporated (VT Aerospace) and Pemco World Air Services Inc. (PEMCO) have
agreed to terminate their asset purchase agreement whereby VT Aerospace intended to
acquire PEMCO's Tampa aerospace facility and certain other assets. The decision to
terminate the agreement was made after certain closing conditions could not be fulfilled by
the seller prior to the closing deadline

http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_01EB80B998E9875048257A5200035A02/$file/Aero_not_proceed_acq_PEMCO.pdf?openelement

DBS sees pressure on margins as Q2 profit beats forecasts

* Q2 net profit S$810 mln vs S$795 mln expected by analysts

* DBS sees some pressure on interest margins, especially in China

* Says committed to pursue Indonesia's Danamon deal

By Saeed Azhar

SINGAPORE, Aug 3 (Reuters) - Singapore bank DBS warned of pressure on interest margins, especially in China, and flagged risks to loan growth, even as it beat forecasts with a 10 percent rise in its second-quarter profit.

The warning mirrored comments by rival Oversea-Chinese Chinese Banking Corp as Singapore lenders brace for an Asian slowdown amid concerns that Europe's debt crisis could dampen business and trade activities in the region.

DBS, Southeast Asia's biggest lender, posted a net profit of S$810 million ($648 million) for April-June against S$735 million a year earlier.

The result was ahead of an average forecast of S$795 million, according to six analysts surveyed by Reuters, but below the first quarter's record S$933 million profit.

Analysts expect DBS to begin a formal regulatory application process for its planned $7.2 billion acquisition of Indonesia's Bank Danamon afterIndonesia came up with new rules to restrict ownership of banks, but allowed some exceptions.

DBS Chairman Peter Seah said in a statement the bank was committed to pursue the Danamon deal and would be fully guided by Bank Indonesia "at every step of the way".

Singapore state investor Temasek owns about 29 percent of DBS, but its stake would rise to 40 percent if the DBS-Bank Danamon deal goes ahead.

The results came after OCBC, Singapore's second-biggest bank, warned on Thursday that loan growth will slow and margins remain under pressure after it posted a better-than-expected rise in quarterly profit.

United Overseas Bank, the smallest of Singapore's top three lenders, will report earnings on Tuesday.

DBS's net interest income, or income from the core lending business, rose 10 percent to S$1.3 billion from a year earlier, as loans expanded by 22 percent. DBS' net interest margin, however, declined by 8 basis points from a year earlier to 1.80 percent in the second quarter.

"Loan pipeline remains healthy, although some headwinds likely," DBS said in its presentation notes. "Expect a little margin pressure, especially in China."

Net fee and commission income fell 2 percent from a year ago to S$379 million, on volatile markets. Bad-debt charges dropped 24 percent to S$104 million.

DBS shares are up about 28 percent so far this year, slightly below UOB's near 30 percent rise, but higher than OCBC's 21 percent jump. The benchmark Straits Times Index is up about 15 percent in 2012.

http://www.reuters.com/article/2012/08/03/dbs-earnings-idUSL4E8J21ND20120803?type=companyNews

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.

BID EXTENDED

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)

http://www.reuters.com/article/2012/08/02/us-apb-heineken-halt-idUSBRE87103G20120802

OCBC says Q2 net profit up 12 pct, beats expectations

Aug 2 (Reuters) - Oversea-Chinese Banking Corp , Singapore's second-largest lender, posted a 12 percent rise in second-quarter net profit on Thursday, helped by strong loan growth and a surge in trading income.

OCBC earned S$648 million ($521 million) in the three months ended June, compared to S$577 million a year earlier. Its profit was higher than the S$606 million average forecast of six analysts polled by Reuters.

The beat was largely due to strong rise in net trading income to S$75 million, an increase of 84 percent from a year earlier, led by higher securities and derivatives trading income.

Trade finance and housing helped fuel strong loan growth for Singapore banks this year, but analysts expect the pace of credit expansion to slacken in the second half of 2012 as Asian economies slow.

Bank loans in the wealthy city-state grew nearly 21 percent in June from a year earlier, central bank data shows.

Analysts expect higher dividends from OCBC in the months ahead after it agreed to sell its stakes in Fraser and Neave and Asia Pacific Breweries to a group of companies linked to Thai billionaire Charoen Sirivadhanabhakdi.

OCBC said on July 18 the banking group would make a post-tax gain of about S$1.15 billion from the deal.

In 2011 it paid a total dividend of 30 cents per share, unchanged from 2010.

http://in.reuters.com/article/2012/08/01/ocbc-results-q-idINL4E8J17JM20120801